Genpact (NYSE:G) on Friday held above a 24.14 buy point, the entry from a breakout the prior day. The flat base formed after the stock failed in a prior breakout attempt Aug. 5.
Genpact is incorporated in Bermuda and headquartered in New York. But the bulk of its 65,000 employees are churning out code at various locations across India, where the company was initially formed as the business processes automation unit of General Electric (NYSE:GE) in 1997.
It became an independent firm in 2005 and went public in 2007.
A Sept. 10 note from William Blair analyst Anil Doradla said companies were increasingly turning to business processing outsourcers (BPOs) like Genpact, boosting Genpact's pipeline and driving up its average deal size, with a growing number of deals above $50 million.
The market is still in its infancy, Doradla noted, with Genpact claiming that fewer than 20% of potential clients outsource.
BPO growth is just reaching disruptive levels among digital technology companies, Doradla said.
Key competitors start with Accenture (NYSE:ACN), the heavyweight technology consulting arm spun out of Arthur Anderson.
IBM (NYSE:IBM) is also an important player, but has become less active in competitive bidding, Doradla said. WNS (NYSE:WNS) and ExlService (NASDAQ:EXLS) are more niche-focused players.
Genpact shares are up nearly 30% this year.
Analysts project a 19% earnings gain on an 8% increase in revenue when the company reports its Q3 results after the market closes Nov. 4. For the year, analysts project EPS up 16% and revenue growth of 9%.
Another Bermuda-based stock, Assured Guaranty (NYSE:AGO), punched back above support this week as it climbs the right side of a cup base.
A central focus for investors recently interested in the stock has been Puerto Rican electrical utility Prepa, which has been struggling to renegotiate its $9 billion debt load with bond holders to avoid default.
Assured shares dived, beginning their current correction, in late June when reports named the company as one of the largest insurers of debt in Puerto Rico, following the governor's call for restructured debt.
The stock has recovered as investors grow more confident that agreements are much likelier than defaults among Puerto Rican debtors.
BY ALAN R. ELLIOTT
Puerto Rico's Debt, India's Programmers And Opportunity
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