ASGN - Embedded Expectations Analysis - 2018 11 26
ASGN Incorporated (ASGN:USA) currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with an 18.9x Uniform P/E. However, even at these levels, the market has bearish expectations for the firm, and management may have concerns about demand across their markets, billable consultant hours growth, and their Apex Systems and Apex Life Sciences revenuesSpecifically, management may lack confidence in the sustainability of strong demand across their federal, local and mid-market, and large national accounts, and in their ability to maintain strong growth in billable consultant hours. Additionally, they may have concerns about their revenue breakdown for Apex Systems, and about their ability to sustain growth of SOW in their retail accounts. They may also lack confidence in the sustainability of strong revenue growth in Creative Circle, and in their ability to continue filling all their clients' needs. Finally, they may be exaggerating their satisfaction with their product numbers for Apex Systems and Apex Life Sciences, and may lack confidence in their ability to provide AIML solutions for document management, document review, and business analytics
ASGN provides information technology (IT) and other services in the technology, digital, creative, engineering and life sciences fields across commercial and government sectors. The company's segments are: Apex, which provides technical, digital, creative, scientific and engineering personnel for contract, contract-to-hire, and permanent placement positions to clients across the United States and Canada; Oxford, which provides staffing and permanent placement services in select skill and geographic markets in the United States and Europe; and ECS, which delivers solutions in cloud, cybersecurity, artificial intelligence, machine learning, application and IT modernization, science and engineering.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
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