Recs

5
Player Avatar adraaj (36.44) Submitted: 8/1/2008 12:53:27 PM : Outperform Start Price: $6.83 VRTU Score: +333.74

Good time and price to pick this underwatched small cap. These guys play in the IT outsourcing field and don't have to do much in order to justify their valuation from this point. They are seeing huge growth (30%) in the banking and financial segments during a rotten time for those businesses. Their overall growth, margins, and cash are very promising.

The reason they are down 30% right now is because they took a risk on their biggest customer, Britsh Telecom. Last quarter they invested in preparing some work for them prior to BT approving the budget. At the end of the quarter, BT didn't get the budget approval. So Virtusa made some investments and hasn't been paid. BT is still a customer in good standing, and their largest. So I am guessing the investments made last quarter will still pay off, but this quarters margins and earnings looked pretty bad because of this.

That said, their revenue still grew 15% last quarter even without the purchase from BT. In IT outsourcing, staffing dictates your capacity and they are building a new 6 acre $30MM campus in Hyderabad. Of which $10MM is already invested. They have cash and short term investments of ~$70MM on hand - that's about half their market cap!!

They are already about 40% insider owned. So they have confidence in their business. They also have just approved a $15MM share repurchse over the next year - that's ~10% of the company.

Overall, huge positive moves for this business with a stock that is unduly beaten up right now.

Member Avatar Jerryskidz (29.26) Submitted: 10/30/2008 11:33:23 PM
Recs: 0

I started tracking this stock back on 10/28 and saw a huge surge of green thumbs in the previous 30 days accounting for 17% of all green thumbs which is abnormally high... considering your well thought out pitch do you have any ideas on the surge? I plan on buying in when the market takes another dive into the 8000-8500 range now that earnings have come out

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