I sold BRCM to buy ITIG... and I'll take my gains and triple them further. No way will BRCM triple... and it might fall to the 80s-90s when all is said and done. That is one volatile stock, and UPSIDE just called it one of the most overvalued stocks in the market.
INFY is a great company, but I won't buy at the current PE levels. Acquiring ITIG at 15 could bring me into the INFY fold, but I'll need to see more revenue before I buy INFY long.
But I'm still cheering for both Indian companies... talk about a country with a great future and past.
I am not familiar with ITIG. But here is my views anyway, correct me if I am wrong.
ITIG could be stuck with a lot of Y2K earnings which will come down to 0 in a few months. Infosys had strategically planned the reduction in their Y2K revenue over time. Last quarter their Y2K revenue was about 8% (I think). They even have an internal fund to take care of contigencies in Dec 2000.
Infosys has an extremely good management, who pioneered so many accounting/management practices in India. They have a good vision of where they want to be in a few years time. Take a look at CEO N. Narayanamurthy's interview at http://www.indiainfoline.com
Infosys has a diversified business all over the globe. I don't think you can say the same of ITIG.
Btw, I don't believe in any internet company. I think only th ebig ones will survive in the long run. So the internet division wouldn't count. (Btw, I don't know what ITIG's internet division does. Could somebody tell me this?)
ITIG has absolutely no revenue being generated from Y2K related work, so they will actually benefit from the passing of the millenium. As companies finalize their Y2K preperation, those funds will be freed up for use in other areas of IT. ITIGs internet division recently created a very successful web page for Volkswaghen, adn as mentioned earlier, is growing very rapidly.
ITIGs managment has always been very upfront and conservative in their estimates.
Good points Dr DoubleWide... INFY ADR's will always trade at a 10-20% premium to the BSE price because of ease of entry and exit on NASDAQ where the Float is also minuscule. Anyone who has traded in India knows the challenges with the markets there vs the hype in the media.
This price run up does appear to be a short squeeze though and one should probably wait before entering at this level. (I am biased because I bought in India many moons ago at a little over a buck per share,post split). On the other hand, if they get lots of offshore internet programming or enterprise level Java work, they could easily double this coming year. Every client I know of has got new development work stalled till Y2K gets over with so there is going to be a surge of orders anyways for INFY.
Could anyone tell me today's short numbers ? - YAHOO only lists Shares Short as of June 8, 1999 = 152.0K ,Short Ratio 2.05
Also, could anyone tell me of ITIG's management ethics ? Remember INFY is now reaping the fruit of years of honesty and clean and transparent accounting practises. Revenue and PE do not a complete picture make. Would that more Indian businessmen running shops like Syntel etc, learn from them :-)