Guru John Hussman (Trades, Portfolio) increased his stake in Infosys (INFY, Financial) by 7042.86%, adding an additional 493,000 shares of the company to his portfolio during the second quarter. The addition had a 1.34% impact on the guru’s portfolio. Hussman now owns 500,000 shares of the company.
Infosys was incorporated on July 2, 1981 in Maharashtra, India, as Infosys Consultants Private Limited. The company changed its name to Infosys Technologies Private Limited in April 1992, and to Infosys Technologies Limited in June 1992, when it became a publicly traded company. Infosys is an Indian multinational corporation that provides business consulting, information technology and outsourcing services. The company is headquartered in Bangalau, the capital of India’s southern Karnataka state.
Infosys has a market cap of $36.57 billion, an enterprise value of $29.73 billion, a P/E ratio of 16.80 and a P/B ratio of 3.87.
GuruFocus gives Infosys a 9 of 10 financial strength rating, with no debt. The company has a strong Altman Z-Score of 12.50, indicating that it is in the safe zone and in no danger of filing for bankruptcy in the near future. The company also has an 8 of 10 profitability and growth rating with a net-margin of 21.42%, an ROE of 23.65% and an operating margin of 26.28%, ranking it above 92% of the 1842 companies in the global information technology services industry.
John Hussman (Trades, Portfolio) may have increased his stake in Infosys during the second quarter for the following reasons.
- The company has reported excellent financial statements over the previous 10 years. Its revenue growth has increased by 19.60%, EBITDA growth by 17.30%, operating income growth by 18%, EPS without NRI growth by 16.50%, its free cash flow growth has increased by 18% and its book value has grown by 21.20% over the previous decade.
- The company is worth $21.64, according to the DCF calculator. Hussman purchased 493,000 shares of Infosys at an average price of $18.71, which gave him an estimated 14% margin of safety with his addition during the second quarter.
- The company is established with 35 years of operating experience, and its dividend growth (3y) has grown by an estimated 62.20% over the last three years. This may be a high variance, because if a company is paying too high of a dividend payout, it may not be sustainable.
The Company has Recently Won Multiple Awards
- The company was also recently honored at Asia’s best companies 2016 awards, winning first place at best investor relations in India and second place in best CEO, best managed companies in India and most committed to corporate governance.
- In 2014, Infosys won a leading green energy award receiving the Gold Award for sustainable buildings at the 2014 International Ashden Awards.
- Infosys also won several awards at the Institutional Investor 2014 All-Asia Rankings, winning best CFO and best investor relations. Nishit Shah is the current CFO of the company, he currently has 18 years of experience working in chartered accounting.
Hussman received a doctorate in economics from Stanford University in 1992, a master's degree in education and social policy in 1985 and a bachelor’s degree in economics from Northwestern University. Hussman founded Hussman Investments in the summer of 2000. He then launched the Strategic Growth Fund, which began on July 24, 2000.
Hussman has also established himself as a philanthropist. The guru founded The Hussman Foundation, which seeks to provide life changing assistance as well as medical research, education and direct aid to vulnerable less fortunate people that have urgent needs or significant disabilities. Hussman Strategic Advisors currently owns 183 stocks with an estimated value of $654 million.
Disclosure:Â Author doesn’t own any shares of this company.
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