Monday, August 31, 2009

Louis Navellier and ACN

This is the story of an old trade, the position was opened on December 2008 and closed on March 2009, but it is interesting to read so to better understand the real performance of Louis Navellier's $5.000/year services.

Mr. Navellier decided to buy ACN on December 1st 2008, when it closed at $29.06. He wrote the following words to his subscribers:
Bermuda's Accenture (ACN) is a familiar name in the U.S. and is the world's largest consulting firm. The company offers management consulting, information technology and systems integration, plus business outsourcing services. Consulting firms often prosper in hard times, when many companies need to reorganize and outsource labor. Accenture operates worldwide, in over 200 locations in about 50 countries, and has a wide array of government-based clients, including the U.S. Air Force.
Accenture's fiscal year ends August 31, and for its final fiscal quarter, its earnings rose 34% to $434.8 million or 67 cents per share, compared with $316.8 million or 50 cents per share in the same quarter of 2007. During the same period, sale rose 17% to $6 billion. New bookings for the quarter rose to $7.67 billion, a quarterly record. Looking forward, Accenture forecast net sales growth of 9% to 12% this fiscal year, on earnings per share of $2.85 to $2.93, for a low current P/E ratio of 10 to 11. Buy below $29.90.

There are two things to notice in ANC's chart:
  1. The actual price movements and buy below prices until sell date March 30th 2009 (see below for details)
  2. ACN's trend after Mr. Navellier sold it

December 8th 2008

Buy below $29.16

December 15th 2008

Bermuda's Accenture (ACN) won an $87 million contract for a new integrated tax system for the state of Maryland. The award was unanimously approved by all leading state officials, including Governor Martin O'Malley, Treasurer Nancy Kopp and Comptroller Peter Franchot.

Buy below $29.88

December 22nd 2008

Bermuda's Accenture (ACN) reported that its first fiscal first-quarter net income rose 26%, due to 6% revenue growth plus a lower net tax rate. The stock rose more than 10% last week on the news.* Accenture's first fiscal quarter, which ended November 30, delivered income of $479.9 million ($0.74 a share) up from $381.3 million (60 cents a share) in the same quarter a year ago. This beat analyst estimates of 68 cents a share. In addition, the company's effective tax rate fell to 26.6%, down from 34.6% a year earlier. Gross profit margins also rose, to 31.4% from 30.1%.

Buy below $32.93

December 29th 2008

Buy below $32.77

January 5th 2009

Buy below $34.82

January 12th 2009

Buy below $34.73

January 20th 2009

Buy below $32.82

January 26th 2009

Buy below $32.97

February 2nd 2009

Buy below $32.75

February 9th 2009

Buy below $33.98

February 17th 2009

Buy below $31.23

February 23rd 2009

Buy below $29.75

March 2nd 2009

Buy below $28.70

March 9th 2009

Buy below $27.93

March 16th 2009

Bermuda's Accenture (ACN) will release its fiscal second-quarter earnings on March 26. Last week, Accenture announced that it had teamed with Connecticut Light & Power Company, a subsidiary of Northeast Utilities, in a pilot program to test smart meters. This program will gauge residential, commercial and industrial customers' interest in peak time-based energy rates–meaning energy is cheaper when demand is less and more expensive when demand is high. The pilot, approved by Connecticut's Department of Public Utility Control, is scheduled to begin in June. With about 3,000 customers participating, this will be the largest customer-focused smart-metering pilot in North America.

Buy below $30.91

March 23rd 2009

Buy below $32.70

March 30th 2009

This week, I recommend that you sell Bermuda's Accenture (ACN) and British Virgin Islands' UTi Worldwide (UTIW). Both companies have essentially moved sideways since their purchase, and haven't exhibited the strength we seek in our Global Growth stocks. After lackluster earnings reports, it's now time to sell.
Now more than ever we need to make sure we hold only the top international companies since the potential for profits in the coming weeks is tremendous, so I don't want you to be stuck in a run-of-the-mill stock that is standing still. Cash out your positions in ACN and UTIW, and get behind our new buys instead.

Close price was $27.83.

Note that the sell price was lower than every single buy below price in 4 months.

And after Navellier's sell order? What did ACN do? It moved from less than $28 to over $36 in August 2009. So, in addition to the 4% loss (actually peanuts) Mr. Louis Navellier also scored an impressive 28% missed gain.

1 comment:

Manager said...