Cognizant Solutions (NASDAQ:CTSH) is a leading provider of outsourced business processing and technology solutions, providing mission-critical services to a base of over 1,200 mostly large global corporate customers primarily in the areas of banking and insurance, healthcare, logistics, and manufacturing. As an indication of just how successful Cognizant has been, a quick review of the financials from 2005 to 2015 reveals a business that grew top-line revenue roughly 14-fold from $885 million to $12.4 billion. Even more impressively, cash flow profitability improved from $68 million to $1.8 billion (roughly 26-fold) during the same span as the company achieved scale and operating leverage. We initially began buying Cognizant stock following the “Brexit” vote. We added to the Fund’s position when the stock sold off further in late September after the company disclosed an internal investigation related to improper payments made by company personnel in India that could be in violation of U.S. anti-bribery laws. We made this incremental investment in the belief that this unfortunate situation is likely to be an issue that will ultimately be resolved without significant financial liability or reputational damage to Cognizant. The stock had already recovered some of its losses by the end of October.
From Zeke Ashton (Trades, Portfolio)'s Centaur Management 2016 annual letter to investors.
