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Insiders Are Investing in Syntel

Insiders Are Investing in Syntel

- By Kyle Ferguson

Syntel Inc. (SYNT) Senior Vice President-Retail, Logistics & Telecom Business Ray Raja, Vice President and Head-Manufacturing Avinash Salelkar, Executive Co-Chairman Ranada Prashant and Director Rex E. Schlaybaugh purchased a combined total of 13,616 shares in April.

Raja purchased 4,265 shares for $17.15 per share on April 25. He now owns 21,256 shares.

Salelkar purchased 1,484 shares for $17.14 per share on April 25. He now owns 15,825 shares.

Prashant purchased 5,867 shares for $17.19 per share on April 25. He now owns 277,967 shares.

Director Rex E. Schlaybaugh purchased 2,000 shares for $17.29 per share on April 26. He now owns 6,114 shares.

Syntel is a global provider of digital transformation, information technology (IT) and knowledge process outsourcing (KPO) services.

The company operates through five segments: Banking and Financial Services, Healthcare and Life Sciences, Insurance, Manufacturing and Retail, Logistics and Telecom. Syntel provides a range of services to its customers through its IT services including Managed Services, Digital One and through its KPO services.

Through its Managed Services offering, the company provides software applications development, maintenance, testing, IT infrastructure, cloud and migration services. Through its SyntBots platform, the company delivers internally developed automation capabilities that improve the productivity and quality of its Managed Services offerings.

The company's Digital One service line centralizes the delivery of digital architecture, web and mobile applications, user experience, Big Data, analytics, social and Internet of Things services.

Syntel has a market cap of $1.45 billion, an enterprise value of $1.91 billion, a price-sales (P/S) ratio of 1.54, a current ratio of 2.11 and a quick ratio of 2.11.

According to GuruFocus, the company has a 5 of 10 financial strength rating with a cash-debt ratio of 0.17 and an equity-asset ratio of 0.47. It has an interest coverage ratio of 75.35. The company's Altman Z-Score is 5.74 indicating that it is in the safe zone and is not in danger of filing for bankruptcy. Its Beneish M-Score of -2.90 indicates it is not a manipulator of its financial statements.

The company has a 7 of 10 profitability and growth rating. It has an operating margin of 26.75%, a net margin of -7.58%, a return on assets (ROA) of -6.48% and a three-year EBITDA growth rate of 5.30%.

Syntel has two good signs according to GuruFocus.

  • Its operating margin is in expansion.
  • Its P/S ratio is 1.44, which is close to its 10-year low of 1.43.

Below is a Peter Lynch chart that suggests Syntel is trading below its intrinsic value

Disclosure: Author does not own any shares of this company.

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This article first appeared on GuruFocus.