5-Star Stocks Poised to Pop: Infosys

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Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Indian outsourcer Infosys Technologies (Nasdaq: INFY) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks have woefully lagged the market average.

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

$13.92 billion

Industry

IT consulting

TTM Revenue

$4.6 billion

Management

Co-Founder/CEO S. (Kris) Gopalakrishnan

Co-Founder/COO S.D. Shibulal

Return on Equity (average last three years)

37.4%

Competitors

IBM (NYSE: IBM),

Accenture (NYSE: ACN)

CAPS members bullish on INFY also bullish on

Cisco Systems (Nasdaq: CSCO),

Google (Nasdaq: GOOG)

CAPS members bearish on INFY also bearish on

Sirius XM Radio (Nasdaq: SIRI),

Toyota Motor (NYSE: TM)

Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, 1,096 of the 1,126 members who have rated Infosys -- or 97% -- believe the stock will outperform the S&P 500. These Foolish bulls include UncleSkell and sunnyman100.

Last week, UncleSkell ran down some of the stock's bullish metrics: return on equity of 34 -- well above the P/E ratio of 11.16; insider ownership pushing 20%; institutional ownership at 17.9%; and increasing earnings per share. He added that the United States is subsidizing the education and training of the workforce.

In a pitch from last month, sunnyman100 shares that enthusiasm, writing:

This is the top leading Indian Software outsourcing firm with positive cash flows and reserves.

It has a ubiquitous presence in the Indian Software arena, attracts top talent, and is the company of choice across the world for their IT and Application outsourcing decisions.

It is well diversified in its customer base (across the world), its operations base (US, India, China, Europe, South America, Russia, [Philippines], etc.), its employee base (comes from all over the world).

What do you think about Infosys, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. CAPS is 100% free, so simply click here to get started.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Accenture is a Motley Fool Inside Value pick, and Google is a Rule Breakers choice. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 28, 2008, at 1:26 PM, DemianBohemian wrote:

    Another worthless article from The Motley Fool with the SIRI symbol in the article.......

    They recommended XM to their paid subscribers at over $30 a share and have been bashing the combined company down in the pennies.....

    Shameful......

  • Report this Comment On November 29, 2008, at 11:10 AM, Denny426 wrote:

    Why so stupid?

    In an article about stocks poised to pop we would again just like to mention one thats in the bears mouth. Its that one called Sirius. Just another reminder in case you forgot. Very funny! (not)

  • Report this Comment On November 29, 2008, at 11:41 PM, ChiefTall wrote:

    Siri. will be ok! You don't even have to believe it but they will be ok. When a company offers something that they themselves effortlessly produce it's bound to pop. It's just like selling drugs, what you get out of it is a whole lot more than you put in to it. Look people, they sell radio subscriptions...the only format of it's kind. Mp3 players dont hold up because you have to use an outside source to get music. Siri, all you have to do is turn it on and start saving Mp3's. I cant wait Im finally going to be rich!! Watch what I say!!!

  • Report this Comment On November 30, 2008, at 7:33 PM, snakeflake wrote:

    Chief, I hope you are right. I for one have not given up hope on Sirius. Lets hope that many kids open up their presents under the tree this year and get SIrius radios and subscriptions. But, I hope the stockholders do not vote for a 50:1 Reverse Split. I think 10:1 would be plenty to keep them listed, and thats what I am worried about. Actually ,If I read the paperwork right we can only vote on the split, not the ratio. I would prefer if we had a choice of how much of a split. All in all I think we will be ok.

  • Report this Comment On December 01, 2008, at 10:53 AM, nasdakboy wrote:

    I jumped off the SIRI bandwagon long ago. It's funny but years ago I made a nice chunk of change in SIRI with 50k shares long at 39 cents. I sold it way too soon on it's uptrend at on $2.00 and never thought it would see my entry point again. Well years later, here it is. I think SIRI's time has expired. I loved the idea, even was a subscriber until I purchased my iPhone. I bought an 08' BMW in April with the ipod/USB connection and now stream music seamlessly through my iPhone in my car and everywhere else. Why would I pay for radio when I can stream any station I want, genre, sports, news, whatever's out there at no cost? Just a matter of time before we start seeing the subscribers begin to dwindle. Also Howard Stern helped build SIRI's subscriber base and with him retiring soon at the end of his contract, his listeners will soon after follow with their subscriptions. Whatever you all decide, good luck and hope you all make money. There's plenty out there for everyone :)

  • Report this Comment On December 02, 2008, at 6:37 PM, realguise wrote:

    Patience. Patience. Patience. It's my understanding that SIRI has nearly 6 months to bypass the $1 mark required to stay listed. Once they announce the refinancing of debt, the stock will skyrocket, at least past the $1 mark. Everything hinges on the refinancing anyway - sink or swim. So to me, there's no need to dilute our shares. I sincerely and desparately hope (and need) for the Board to resist the urge for a reverse split so we can all reap the rewards of our risk and loyalty.

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