No. of Recommendations: 8
With indices seemingly hitting new highs every week there seem to be quite a few "blue chip" companies that are at or near 52 week lows.
Just off the top of my head:
Accenture
Nike
McDonalds
Progessive
Abbott Labs
Paychex
ADP
I know there are many more.
I realize that just because a stock is near its 52 week low doesn't mean it's cheap. Anyone nibbling on any of these names?
No. of Recommendations: 17
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 ;-)
No. of Recommendations: 0
Despite "depressed" share price levels...
After hitting a 6-year low, seems like calling the Mariana Trench a "depression". ;)
Guess I'll grab my limbo pole and head over to the falling knives board.
No. of Recommendations: 3
Massive AI Bookings Surge
Today: We will help you manage your transition to the new "AI world".
Two years from now: We will help you fix your AI transition failures.
They'll have plenty of AI-related bookings for a good number of years.
No. of Recommendations: 3
What is the general bear theory for Accenture?
It has certainly fallen bigly...whether its deserved or not is interesting as a project.
No. of Recommendations: 11
"What is the general bear theory for Accenture?"
I competed with Accenture when I worked in Europe. I beat them while running BP and then Shell for an IT company. They are very formidable and have excellent C suite relationships and software assets.
The bear case is there will be WAY less demands for bodies and therefore billable hours for legacy IT services with AI. ACN's most recent book to bill was 1.2x which is positive.
The bull case will be predicated upon how well their AI acquisitions and talent repositioning goes.
Inexpensive at 10x free cash flow.
