Thursday, 4 December 2014

The King has no Clothes………...analyst says CSC stock currently worth $40 or less!

A Wall St analyst covering CSC has said that the king has no clothes.  At last!


According to an article in Washington Business Journal; Rod Bourgeois, founder of DeepDive Equity Research, 
describes CSC as a risky bet whose current value is between $33 and $40  Our thanks to the reader who told us about this article, which can be found here


Bourgeois knows CSC well, having previously followed them
as an analyst for Sandford C Bernstein.  He did not behave
like a CSC groupie at the quarterly Analyst conferences, but nor did  we hear him expressing much skepticism of CSC pronouncements either.   Maybe he is now giving his own opinion instead of having to express the party line of his former employer. 

The reasons he gives for his opinion are:

·      Emerging Patterns suggest CSC turnaround effort is stumbling
·      Revenue and margins below expectations
·      “Over-earning” from balance sheet improvements; cost      savings now largely realized
·      Choppy cash flow, with recent improvements being due to short-term factors such as tax and pension benefits
·      Lack of specifics on the second phase of the company’s turnaround plans.


Mr Bourgeois compares CSC turnaround efforts to those of 
EDS, which failed when the focus turned to revenue growth. He also feels that a CSC takeover could be viewed as a desperation-move for an acquirer.

With a current price of around $66, there is a tremendous 
risk involved in CSC shares today, if one believes Mr Bourgeois’ thesis, which we do and as we have said for some time.

We also wonder how confident other Wall St analysts are 
with their employers’ official opinions and published target prices for CSC.  Or now that Rod Bourgeois has said that the king has no clothes, will other analysts start getting real?

All together now ............
The King is in the altogether, but altogether, the altogether He's altogether as naked as the day that he was born The King is in the altogether, but altogether, the altogether It's altogether the very least the King has ever worn"



 posted by Littlejohn

30 comments:

Anonymous said...

Must watch video (credits to whoever put this together):

http://captiongenerator.com/19655/Mike-dictates-the-company-direction

Anonymous said...

Madness continues. Recent assembly with what corporate refers to as ‘people managers’ confirmed little or no increase in raises expected for next round of reviews, which occur sometime nearing Spring 2015. Meanwhile, expectation that employees will give it their all hasn’t abated and underscrores glaring managerial disconnect with employees.
Losing good people and word circulating that more on on their way out (volutarily). Opportunities opening up and people are vacating this sinking ship.

Anonymous said...

Great! Thanks for posting.

Anonymous said...

Caption generator... Hilarious. I propose it gets added into skillsoft for new starter training.

Also the grads should review it. They are a bunch off self centred want it all for nothing apprentice wanna be... With no long term future in the gigantic that is CSC.

Anonymous said...

Just a matter of time before CSC is served with Show Cause Letters on a few contracts in the area I am in. For me I enjoy the work I do, accept that I will not get a raise and will try waiting out the 1 1/2 years to retirement.

Anonymous said...

"analyst says CSC stock is worth less"

Are you sure he didnt say "CSC stock is worthless" ?

Anonymous said...

Lawrie is cashing in once again.

Computer Sciences (NYSE:CSC) CEO John M. Lawrie sold 6,280 shares of Computer Sciences stock in a transaction that occurred on Friday, December 5th. The shares were sold at an average price of $65.24, for a total value of $409,707.20. Following the sale, the chief executive officer now directly owns 137,150 shares in the company, valued at approximately $8,947,666.

Anonymous said...

Any information on the People Manager Assembly? Where was that and was it regional?

Anonymous said...

err, that's 76,000 shares sold for $4.75m in just over 3 weeks...

https://uk.finance.yahoo.com/q/it?s=CSC

...looks like someone knows the light at the end of the tunnel is actually a train?

Anonymous said...

Excellent article that surveys the CSC fiscal landscape: http://www.bizjournals.com/washington/blog/fedbiz_daily/2014/12/csc-on-growth-challenges-industry-performance-is.html

Anonymous said...

From that article "The strategy focuses squarely on pushing technology solutions, most notably in emerging areas like big data, mobile and software-as-a-service. "

Oh so another statement on the future strategic direction.

Its actually this flip flopping of strategy that concerns me the most about CSC in the last few years. Strategy is not something you change every week with your shirt (like Mikey seemingly does). Strategy is something you need to stick with for some time to enable you to invest and look for the rewards.

This is not a strategic company, everything is short termism - but then again, I guess Mikey is only here to see out his contract, not be a permanent employee.

Setup game rules like that and its unsurprising the way the game gets played...

Anonymous said...

It would appear that the the emerging technologies either aren't kicking in or they are replacing exisiting GIS/GBS revenue streams and therefore no breakdown of the revenue is ever published..

Anonymous said...

Additional information to digest: http://www.bizjournals.com/washington/blog/fedbiz_daily/2014/12/fmr-trims-stake-in-csc-by-more-than-50-percent.html

Anonymous said...

http://m.bizjournals.com/washington/blog/fedbiz_daily/2014/12/csc-provides-employees-more-details-about-one-week.html

This is bullshit. Csc holiday outstanding on the books is a cost. They force pople to take holiday to reduce cost liability to make books look better.

Also with redundancies and appraisals threatening those that do not agree.. you have no choice.

Has been going on for years in the creative accounting that is CSC.

Anonymous said...

I don't think the management make any secret of why they want you to take the leave - do they?

It is all about moving liability around on the books as you say.

I'm not quite sure what it adds up to in dollars by doing this, there certainly is not a global adoption of this policy by any means, although I was rather disappointed, if not surprised, that the UK Union had bugger all to say about it (even if under UK employment law this is perfectly acceptable employer action). I suspect our somewhat more forthright European cousins had rather more to say about it, words like "non" or "nein"...

Anonymous said...

Even the revised 2nd Half FY15 Sales Compensation Plan is crap. Guess there will be no sales people left.

Anonymous said...

If there are no sales people at least CSC won't win business it then finds it can't resource!

Anonymous said...

Another loss for CSC regarding overseas wages:
http://www.courthousenews.com/2014/12/16/defense-contractor-on-hook-for-back-wages.htm

Anonymous said...

So. Sales people leaving or on the way out the door. Technical leaders left or leaving. The future looks bright. Do it Mikey. Do it good!

Anonymous said...

Another 32 million dollars leaves the company as dividends... happy Christmas Wall Street, we got bugger all.

Anonymous said...

https://www.youtube.com/watch?feature=player_embedded&v=OTCuYzAw31Y
Has Mikey asked any of us "What do you need?"
'nuff said.

Anonymous said...

http://popist.com/s/a405b3c/

Does this sound vaguely familiar to anybody???

Anonymous said...

2015
Either CSC will grow
Or it will have a new CEO

Place your bets!

Anonymous said...

I'll go for growth and a new CEO

Anonymous said...

CSC's old business model (outsource and purge) is outdated and the company isn't nimble enough and no longer has the management or technical talent to be competitive in the Cloud, Security, or Big Data spaces. I predict continued revenue decline and a new CEO unless a buyer is found. However, I don't know if it will happen in 2015. I believe the decline may be slow enough that Lawrie may fool the market and/or the Board well in to 2016.

Anonymous said...

In another signal of his confidence in the company's future, Mike Lawrie unloaded a further 3,200 CSC shares on Friday, December 19th. The stock was sold at an average price of $63.42, for a total transaction of $202,944.00.

Anonymous said...

So, I wonder if current CSC employees are ready to leave Cheese Station "CSC" yet? Too many "Hem" types? Be a "Haw" and find some new cheese folks. I did and am the better for it. This will be my last post, just wanted to share this video in hopes it may encourage some "Hem"s to get some courage and move on. https://www.youtube.com/watch?v=tDNhEYpBPbY

Anonymous said...

I don't see another 12 months of fooling. Time is running out for sell-my-CSC-shares Mikey.

Anonymous said...

Another 190 million dollars spunked away....

http://finance.yahoo.com/news/computer-sciences-corp-restate-results-230507507.html

Not sure I understand the full implications of the movement of the monies between previous financial years, but the full detail is here on the 8K:

http://biz.yahoo.com/e/141229/csc8-k.html

Anonymous said...

... you do realize that the employees will have yet another "cost challenge" to make up that 190M ....