General Investing
Volumes and RFPs Increase for Call Centers
May 17, 2011Call center volumes and requests for proposals (RFPs) picked up over the last three quarters along with the improving economy. This trend is expected to continue, making the largest vertical within business process outsourcing (BPO) even bigger, says Matthew J. McCormack, an Analyst at BGB Securities.
“There’s only about $50 billion or so of call center work that is outsourced out of roughly $300 billion,” McCormack said. “So there is still an embedded amount of growth just within their existing client base, as more companies decide to outsource more of their business.”
McCormack points to Convergys Corp. (CVG) as his favorite pick among staffing and outsourcing companies levered to call centers. CVG underwent senior management changes, signed a contract with AT&T (T) and displaced IBM (IBM) as the BPO provider for Dun & Bradstreet (DNB).
“[Convergys is] trading less than the group at about 6.4 times,” McCormack said. “You got a new CEO who’s already got the results. He’s focused. The business margins have improved since he has been there, and you have the new wins in the pipeline.”
