Subject: Re: Strange Market
I agree that there are high-quality companies, like Berkshire, that appear very attractively valued in today's market. Out of the stocks you mentioned, I have long-term investments in ADP and Paychex (which I previously discussed on The Falling Knives board). I have also owned Accenture for many years. Julie Sweet, the CEO of Accenture, is the type of manager I believer Buffett would admire....so here is a potential $100 billion elephant that Berkshire could hunt today at its current attractive valuation ;-)

As of May 2026, Accenture's stock currently trades at about 14 times earnings, a steep discount compared to its historical average of 27x–30x.
The case for a sharp recovery is built on several key pillars:

1. Massive AI Bookings Surge
While the market has feared that AI will cannibalize consulting hours, Accenture's data suggests the opposite. The company reported record new bookings of $22.1 billion in Q2 2026, with advanced AI bookings nearly doubling year over year. Strategically, Accenture views AI as a significant tailwind, leveraging its deep ecosystem of partners and its long-held role as a primary point of contact for operational optimization. Management emphasized that AI is now a massive part of their business, offering a unique opportunity to capture value as clients transition from experimentation to full-scale integration. The firm believes that the revolutionary potential of AI depends entirely on a company’s ability to utilize it effectively, a mission that aligns with Accenture's 50-year history of navigating complex technological shifts for global enterprises.

• Lead Indicator: These bookings typically convert to revenue over 2 to 4 quarters, suggesting an organic growth acceleration is imminent.

• Scale Advantage: With over 85,000 AI and data professionals, Accenture is increasingly seen as the essential partner for complex enterprise AI deployment that automated tools cannot handle alone.

2. Aggressive Capital Allocation & Attractive Yield
Management is using the stock's weakness to aggressively return capital to shareholders, which supports earnings per share (EPS) growth even during periods of moderate revenue.

• Shareholder Returns: Accenture plans to distribute at least $9.3 billion to shareholders in fiscal 2026 through buybacks and dividends.

• High Yield: Due to the price drop, the dividend yield has risen to approximately 3.7%, more than double its five-year average, creating an attractive entry point. The company expects to generate $11.2
billion in free cash flow in fiscal 2026 (+46% in the first half of the fiscal year), resulting in a highly attractive free cash flow yield of 10%.

3. Improving Fundamentals & Efficiency
Despite "depressed" share price levels, Accenture continues to beat financial forecasts:

• Earnings Consistency: The company has consistently exceeded EPS and revenue estimates in recent quarters, including a beat in March 2026. Return on equity has consistently exceeded 20% over the years.

• Margin Expansion: Operating margins expanded by 30 basis points recently, driven by a shift toward higher-value AI services and internal productivity tools.

• Acquisitions: Accenture increased its acquisition budget to $5 billion for 2026 to snap up AI-related software firms while they are relatively inexpensive, fueling future inorganic growth.

I think Accenture is worth a nibble ;-)