+ Watch EPAM
on My Watchlist
EPAM Systems has been on my watch list since it crashed from $42 to $32, about 25% the end of February. I look at stocks that make large moves, looking for a dog that just got called out or an over reaction/sale in the case of a decrease. t Or looking for a short covering excessive increase on a huge upswing.Sometimes I find something that isn't easy to quantify and watch it for a few weeks. Of course I finally pulled the trigger on an up thumb on EPAM and the markets crash 1.5% pulling it down hard as stocks on edge are often affected harder during a large swing as tentative buyers run.EPAM had had a good two year run until the "correction" in Feb. EPAM sells software product development services. AS a momentum stock, a lot can be forward priced, a lot of expectations baked in, and a disappointment can cause a hard hit/reset. Not a lot of reason for the drop. Revenues were up 25.5% YoY. Gap income up 24%, EPS up to $1.24 from $1.17, showing slowing growth and leaving EPAM with a high P/E that was unsupported by growth. Guided slowing growth. It appeared it was due a small price decline, but then insiders sold and Europe/Ukraine "happened".Because EPAM has a large percent of business in Central and Eastern Europe, the Ukraine situation may be preventing an increase in share price. The large drop today was "supposedly" based on China reports, but hit Russia equities exceptionally hard, so it may have been a mix of jitters. Based in the US, but 9,300 employees worldwide.With the drop in price to the low 30's, I believe this is "better valued". I expect a bump when Europe settles, then slow growth that should beat the S&P. I believe it would have regained some of the loss has the Europe/Ukraine/Russia situation not piled on top.
Solid recommendation now over sold
Ukraine and Russia situation has escalated tensions and it's knocking EPAM down 12%, which I think is an over-reaction for what this company can deliver over the next several years. The near-term is uncertain as it is for all stocks. But the long-term picture is brighter for the company, its founder (who owns a lot of stock) and the sharedholders. Outperform by 2018.
per IBDvalue investor
This stock was the Zacks Bull-of-the-Day on the day it was placed in the CAPS portfolio. All Bull-of-the-Day picks are marked with the green checkmark in the CAPS portfolio.
Going public on NYSE should attract more serious clients. EPAM also has superior quality of service comparing to traditional IT service providers from India and China.
Terrific numbers: low PE, high PEG, no debt, 24% ROE, 24% ROIC, 2011 free cash growth 209%, a growing company serving N.A. and Europe with leading-edge technologies across large number of clients. No analysts following yet. Should grow more rapidly with improvements in developed Europe.
Good growth and low PE
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