Lisa Ellis, Senior Analyst at Sanford C. Bernstein & Co., says Cognizant Technology Solutions Corp (CTSH) is an IT services firm that is not as well-known as Accenture, and as a result is priced favorably.
What is very differentiated about what Cognizant does is that they are almost exclusively industry-specific work. For example, two of their big industry verticals are health care and financial services, so they were enormous beneficiaries of Dodd-Frank and Obamacare, because when a bank needs to write a new risk management application to make sure that they are conforming to the Dodd-Frank requirements, they would call Cognizant to design and build that application for them. Their bread and butter is custom application development for industry-specific applications.
Ellis says Cognizant has a strong legacy in offshore because it was a spinout of Dun & Bradstreet 20 years ago.
They were the offshore-shared services center of Dun & Bradstreet. But they have a much higher value bend than is often perceived, and because of this domain expertise they’ve got, they are very well-positioned as the industry makes this industry shift. And the stock not well-understood, and so like right now they are my top 1H16 pick across all my coverage.