DXC Technology (DXC) TL;DR Summary High uncertainty low risk

The Genius’s Stock Market Newsletter: DXC Technology TL;DR


Bullish trading/investing strategies

Company Overview/Description:

DXC helps Fortune 1000 firms do relatively simple things like run their back offices, as well as very difficult tasks like writing sophisticated software. Operates two segments of its business Global Business Services (GBS) and Global Infrastructure Services (GIS.)

Opportunity / Setup / investment Thesis

Original spinoff/merger rationale that created DXC failed to deliver. Watched $25Billion revenue evaporate and near future shows no signs of slowdown. 2019 was the year of lower margin business mod and 2020 was the accelerant towards a worsening entity despite significant growth IT industry for digitization/Internet of Things/Web 4.0

Catalyst / Why now

Assets sales, continued share buybacks to significantly reduce outstanding shares, reinstitution of suspended 2020 dividends

A focus on increasing free cash flow for the long term, continued asset sales to improve top line profit margins along with access to capital debt markets for more meaningful near term share buybacks and dividend reinstatement to return capital excess capital to shareholders.


Is this related to berkshire hathaway? Should it be marked OT?


As I was trying to select a hashtag it was not letting me enter my own hashtag so I chose the closest. The site is not very intuitive and a bit of a learning curve

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In good times this company sucked, in a recession it will suck even more. What asset sale? They have already spin-off healthcare, public sector etc. You cannot shrink yourself to profitability, higher margin. The cost reduction by firing has run its course, so is moving work to Offshore. This is a secular downtrend. For those who don’t know the backstory, no body wanted to touch HPE ES (enterprise service) division the $25 B revenue company was sold to $6 B CSC, they called it merger. Combining two failing business doesn’t produce a winner.

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