Long

Amdocs Limited | DOX | Long at $51.80

Amdocs Limited

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

$60.00 (+15.8%)
$62.50 (+20.7%)

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