Syntel, Inc. (NASDAQ:SYNT)

NorthCarolinaKen (< 20) Submitted: 1/9/2009 5:54:46 PM : Start Price: $24.19 SYNT Score: +81.74

Syntel is a US based outsourcing company but that probably understates their business plan. They take over almost anything related to IT that a customer can't tackle or doesn't make sense to tackle. Customers, an insurance company for example, is in the insurance business, not in the playing with the latest tech widgets business. IT is at best a distraction and at worst a capital and a resource drain. Syntel will get the job done in the best way possible, onshore, offshore or a combination. The "combination" idea I have personal experience with where the development team is scattered around the world but thanks to modern communications and development tools, the members work as closely as if they were in the same building except progress proceeds 24 hours a day instead of 8 or 10. They also have areas of special expertise, like building and maintaining websites. TTM ROIC is 35% up from a 5 year average of 27%. Debt to equity is zero. No debt. Growth is about 18%. How is the company fairing though this recession? Last quarter Syntel reported a year over year quarterly revenue increase of 18% and earnings of 21%. In terms of valuation, PEG is .08, trailing PE 14 and forward PE 12. I have the historical mean at about 20.