Amdocs Limited | DOX | Long at $51.80

Amdocs Limited DOX

TECHNICAL ANALYSIS

• Price entered my selected "crash" simple moving average area (green lines). This area is often, but not always, a zone of algorithmic buying. Thus, only a starter position at $51.80 was entered.
• High probability of the price declining near $44.00 before a true reversal - especially if the upcoming earnings are weak. Last open price gap since the pandemic is between $46.73 and $47.75. This will likely be "closed" and is another zone of personal buying for a stronger position.
• If price significantly falls though the "crash" level, next major support area is at the gray lines (or my "major crash" simple moving average zone). This zone is currently between $34 and $44. Final major entry will be there. I plan to exit previous smaller positions (like this one) if/when the price rises above each to hold solid "major crash" entries for larger returns. It may not reach the "major crash" levels in the near-term, but if it does...

INSIDERS

• Pretty quiet: openinsider.com/DOX

GROWTH

• EPS and revenue anticipated to rise into 2029: tradingview.com/symbols/NASDAQ-DOX/financials-earnings/?earnings-period=FY&revenues-period=FY

FUNDAMENTALS

• Annual Revenue = $5 billion
• Current P/E = 10x
• Bankruptcy Risk / Alman's Z-Score = 4.7 (low risk / healthy)
• Debt-to-Equity = 0.3x (healthy)
• Short-Term Debt / Quick Ratio = 1 (some risk)
• Dividend Yield = 4.40%
• Free Cash Flow Yield = 12.3% (great)
• Float = 108M
• Short Interest = 8%

ACTION

• Highly undervalued in the tech space with a strong dividend. At the standard blended P/E of 15x, this should be near $111.00. But the market is revolting against software companies, and I don't necessarily think this is bottom in the near-term. Thus, I am entering a starter position at $51.80 with future buys setup if the price drops - especially post earnings. As mentioned above, my plan is to sell this, other higher entries, and hold the lowest position if/when the true reversal happens. Targets are conservative given the overall market sentiment against software.

TARGETS INTO 2029

1. $60.00 (+15.8%)
2. $62.50 (+20.7%)

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