April 06, 2005
SunGard Buyout May Indicate BPOs Are Undervalued
SunGard Data Systems, a financial-services software and backup-and-recovery service provider is being bought for a full 14% premium over the market price. This move indicates that this company in particular, and BPO providers in general, may be undervalued by the market. While the Sungard deal is not expected to close until the third quarter, investors are already examining the sector for any other undervalued stocks indicating, of course, that we should likely see a general rise in BPO firms' stock in coming weeks. Wall Street & Technology Reports:
Affiliated Computer Services, Fiserv, and First Data are among those deserving a second look, Smith says in the report. Those stocks "are all trading at very attractive multiples, offer relatively high earnings stability and visibility, generate strong free-cash flow, and should offer good downside protection in any tough environment for technology investing," he says.
Read More: Wall Street Undervalues Some Service Providers
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