In my opinion, Why this is a Strong Buy23 Apr 2020 10:40
It is an unprecedented times and this is affecting all business, totally agree.
However, imagine a business that is purely focussed on service sector, mostly for government contracts and some key private sectors.
Most of the IVR is managed by Capita. So, the technology service arm of Capita is not affected. Even if we think the whole of Capita business model is affected for a 2 months out of 12 months, the 10 months is still going to run the engine strong. Capita is not servicing on 1 particular area, it is spread across multiple areas that proves the risk is less.
SP won't reflect direct value sometimes. However let us do a like for like comparison.
Capita was trading on lowest average of 150p before the lockdown and the current sp is 30p (ie. just 20% of the lowest average price of 52 weeks high).
Rather than taking 2 months lockdown, lets assume the lock down effect is 4 months that discounts to max of 50p of the lowest average of 150p. Even then the sp should be at 100p when everything gets back to business.
So in my opinion, taking a long run decision could reap more rewards than that of turkey fry talks ;)
Lets look forward for a greater and bright tomorrow. Think positive, stay calm, stay at home, but stay focussed.
Note: This is not a buy or sell advise, do your own research and make decisions.