How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Accenture (
ACN Quick Quote ACN - Free Report) ten years ago? It may not have been easy to hold on to ACN for all that time, but if you did, how much would your investment be worth today? Accenture's Business In-Depth
With that in mind, let's take a look at Accenture's main business drivers.
Years of investment in digital, cloud and security strategy has helped Accenture evolve as a trusted and viable consulting services provider. It is currently the world’s top consultancy firm by revenues that increased 5% in 2019 with a contribution of 56% from consulting services.
The company has spent decades establishing itself as a trusted advisor, continuously adjusting its business mix to take advantage of changing market conditions. It has extensive relationships with World's leading companies. Currently, Accenture’s clients comprise 92 of the Fortune Global 100 and more than three-quarters of the Fortune Global 500. Ability to anticipate large, transformative technology trends and capitalize on them through mergers and acquisitions are keys to the company’s success.
Accenture reports under five segments, which are discussed below:
Communications, Media & Technology
(20% of FY20 revenues): Offers services to communications, electronics, high technology, media and entertainment industries. Financial Services (20%): Offers services to banking, capital markets and insurance industries. The segment enables clients to address growth, cost and profitability pressures, industry consolidation and regulatory changes. Health & Public Service (16%): Offers services to the healthcare providers, government agencies, public service organizations, educational institutions and non-profit organizations. Products (28%): Offers services to the companies which belong to Air, Freight & Travel Services, Automotive, Consumer Goods & Services, Industrial Equipment, Infrastructure & Transportation Services, Life Sciences and Retail industries. Resources (16%): Offers services to the companies which belong to chemicals, forest products, energy, metals and mining, utilities and related industries. The segment helps clients manage complex change initiatives and integrate digital technologies. On the basis of nature of work, the company derives its revenues by providing Outsourcing (44% of FY20 revenues) and Consulting services (56%) . Geographically, 46% of total FY20 revenues were generated in North America, 34% in Europe and 20% from Growth Market. Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Accenture a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in July 2011 would be worth $5,128.26, or a 412.83% gain, as of July 23, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 224.71% and the price of gold increased 8.31% over the same time frame in comparison.
Going forward, analysts are expecting more upside for ACN.
Accenture's shares have outperformed the S&P 500 index in the past year, partly due to earnings and revenue beat in the last three quarters and raised fiscal 2021 guidance. The company has been steadily gaining traction in its outsourcing and consulting businesses. The company has been strategically enhancing its cloud and digital marketing suite through buyouts and partnerships. The company’s strong operating cash flow has helped it reward its shareholders in the form of dividends and share repurchases, and pursue opportunities in areas that show true potential. However, pricing pressure due to significant competition from strong companies like Genpact, Cognizant and Infosys, remains a concern. Global presence exposes it to foreign currency exchange rate fluctuations. Buyout-related integration risks continues to remain a concern.
The stock has jumped 7.79% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 11 higher, for fiscal 2021; the consensus estimate has moved up as well.