Accenture

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1. The Move

Accenture Plc rose about 18 bags in a more or less linear fashion:

Accenture Plc rose about 18 bags in a more or less linear fashion chart

The largest drawdown was -39% between 2007 high and the 2009 low.

2. Business Description

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology, and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions — underpinned by the world’s largest delivery network — Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 505,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.

3. Fundamental Situation at Bottom & Top

Accenture Fundamental Situation at Bottom & Top

4. Brief Story

Accenture is useful to show that a tenbagger can start its move from a market cap above $10 B. The company already had a strong Balance Sheet in 2002; it had a Net Cash position of $1.25 B.

At its lows, the stock traded with a p/e ratio of 21 and a price to book of 6.1, so it wasn’t cheap. Accenture was always very profitable and never traded with low valuation multiples… sometimes it just isn’t possible to buy high-quality companies at bargain prices. You need to pay reasonable prices if you want them.

Accenture strengthened its Balance Sheet even more over the years and currently has almost $6 B in Net Cash, even while it bought back roughly 1/3 of its shares outstanding and paid good annual dividends. There was also some multiple expansion, and now you have to pay 28 times earnings to own a piece of the action.

Accenture looks like an outstanding business, with a deep moat… now this got me thinking I should add another metric to my studies of tenbaggers of the past, which is the profit margin. Many tenbaggers probably enjoyed margin expansion. In 2002, Accenture’s net margin was 3.8%, and over the past year, it was 11.1%!

5. Conclusion

A tenbagger can start from anywhere, above $10 B and also above $100 B, as any company worth $1 T today (Alphabet, Amazon, Apple & Microsoft) was once worth “just” $100 B.

César Borja

César Borja

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