Tuesday, 28 October 2014

Allegations of unethical and illegal behavior by CSC

Allegations of unethical and illegal behavior by CSC

US Government charges CSC, along with New York City, with Medicaid fraud, says Corporate Crime Reporter

Federal prosecutors allege two fraudulent schemes involved CSC and New York City using computer programs to circumvent the requirement that Medicaid should be billed after private insurance coverage had been exhausted. A third fraudulent scheme involved the use of a defaulting to systematically falsify diagnosis codes submitted to Medicaid.
Federal officials alleged that these fraud schemes caused the submission of tens of thousands of false claims to Medicaid and allowed New York City, through CSC, to  improperly to obtain millions of dollars of Medicaid reimbursements.
Full details of the Corporate Crime Reporter article can be found on:  http://www.corporatecrimereporter.com/news/200/computer-sciences-corporation-charged-medicaid-fraud/

After the other allegations of unethical behavior by CSC in the recent past is anyone surprised by this turn of events? Would you buy a used car, sorry, an IT system, from a company with these business practices?

News web sites carrying this piece include:
New York Times: http://www.nytimes.com/2014/10/28/nyregion/new-york-city-agency-and-vendor-csc-bilked-medicaid-us-say.html
CNN: http://money.cnn.com/2014/10/28/news/companies/new-york-medicaid-fraud/index.html
Press TV:  http://www.presstv.ir/detail/2014/10/28/383947/feds-sue-new-york-city-for-medicaid-fraud/
Biz JOurnals:

By Littlejohn

Friday, 3 October 2014

Living in a dream world

WatchList News today reported that:
Computer Sciences (NYSE:CSC) was upgraded by equities researchers at Morgan Stanley from an “underweight” rating to an “outperform” rating in a research report issued on Wednesday. The firm currently has a $60.00 price target on the stock. Morgan Stanley’s price objective would suggest a potential upside of 1.71% from the company’s current price.
The analysts wrote, “The Bloomberg article indicated that CSC contacted Blackstone and Bain Capital regarding a potential LBO. The company has taken similar action previously, but now there is a new management team. As we’ve written before, investors are still waiting to see evidence of execution with a number of metrics indicating a declining platform rather than a recovering one. Cash flow yield and low leverage have CSC screening well but a buyout at this point would likely require a potential buyer to reward current investors for execution yet to come. CSC management has not publicly commented on the possibility of an LBO.”
Other equities research analysts have also recently issued reports about the stock. Analysts at Raymond James upgraded shares of Computer Sciences from a “market perform” rating to an “outperform” rating in a research note on Tuesday. They now have a $75.00 price target on the stock. Separately, analysts at Goldman Sachs initiated coverage on shares of Computer Sciences in a research note on Monday. They set a “buy” rating and a $72.00 price target on the stock. Finally, analysts at Zacks reiterated a “neutral” rating on shares of Computer Sciences in a research note on Thursday, September 11th. They now have a $63.00 price target on the stock. Ten equities research analysts have rated the stock with a hold rating and six have issued a buy rating to the stock. Computer Sciences has a consensus rating of “Hold” and a consensus price target of $65.50. (End quote)

Some of these analysts are in a spreadsheet-induced dreamworld.  A story comes that CSC is trying to find a buyer and, bang, analysts upgrade their outlook and target price for CSC stock. Raymond James and Goldman Sachs rate CSC as “outperform” or “buy” with target prices of $72 and $75.  Based on what?  An in-house analytical spreadsheet model?  We do not think it is based on the analysts going out and speaking to customers, competitors or employees, nor on revenue levels nor on business won.

I would not like to have bought any CSC shares at $75!

The Caterpillar was the first to speak.
`What size do you want to be?' it asked.
`Oh, I'm not particular as to size,' Alice hastily replied; `only one doesn't like changing so often, you know.'