4-Star Stocks Poised to Pop: Infosys

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Indian consulting giant Infosys Technologies (Nasdaq: INFY  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Infosys' business and see what CAPS investors are saying about the stock right now.

Infosys facts

Headquarters (Founded) Bangalore, India (1981)
Market Cap $35.6 billion
Industry IT consulting and other services
Trailing-12-Month Revenue $6.04 billion
Management

Co-Founder/CEO S. D. Shibulal

CFO V. Balakrishnan

Return on Equity (Average, Past 3 Years) 29.4%
Cash/Debt $3.8 billion / $0
Dividend Yield 0.7%
Competitors

Accenture (NYSE: ACN  )

Hewlett-Packard (NYSE: HPQ  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 97% of the 1,156 members who have rated Infosys believe the stock will outperform the S&P 500 going forward. These bulls include chocoswiss and All-Star huddaman, who is ranked in the top 5% of our community.

A few months ago, chocoswiss tapped Infosys as an honestly run opportunity: "Management practises practical, conservative and moral values in all decision makings. Good governance will pay-off in mid-long run."

Over the next five years, in fact, Infosys is expected to grow its bottom line at a brisk rate of 17% annually. That's faster than other IT consulting giants like Accenture (13%), HP (9%), and IBM (NYSE: IBM  ) (11%).

CAPS All-Star huddaman elaborates on the Infosys bull case:

A long term secular trend is in favor of Infosys's and other IT outsourcing and BPOs. ... These company's are growing revenues at 12-25% rate annually. They require very little investment, and didn't really feel any pain during 2008-2009 slowdown. The long term secular up-trend trumped the recession down trend. A 24 P/E makes this company undervalued. Only major risk is weaker corporate governance standard in India. However, [Morningstar] gives this company stewardship grade of B, which is pretty good.

What do you think about Infosys, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Accenture and Morningstar. The Motley Fool owns shares of IBM and Morningstar. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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