Eric Savitz reports on Concord EFS in this week’s Barrons.
The combined effects of the hedge-fund incident, the SEC rumors and slightly messy accounting in the latest quarter have taken their toll. The result, though, is an opportunity to buy a highly profitable, fast-growing company at a relatively low price. Concord should earn a little over $400 million this year, or about 75 cents a share, on revenues of $2.2 billion. For 2003, the Street is figuring on roughly 25% earnings growth, to about $500 million, or 95 cents a share. Labry says he’s “comfortable” both with the current range of Street estimates and with the notion that the company can keep growing at 25% a year for the foreseeable future. With the stock a shade under 20, you’re paying about 20 times 2003 earnings — not bad for a company growing that fast.
Olga Kharif writes a similarly upbeat story in Business Week.