This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Should You Buy It? Maximus to the Max

The company said that the accelerated share repurchase will not affect its previous $40 million buyback program. Management said it still plans to complete the program over time. Maximus ended the September quarter with $196.7 million of cash on the balance sheet and no debt. Additionally, the company returns cash to shareholders through its 10-cent quarterly dividend (1% yield).

Maximus also announced solid fiscal fourth-quarter results Nov. 14. The company earned 68 cents a share, which was 3 cents ahead of expectations. Revenue grew 17.5% year over year to $201.9 million.

Credit CEO Richard Montoni, who took office in April 2006, for Maximus' new strategy and growth outlook. His goal is to shift the company away from growing revenue at all costs toward more -- and smaller -- contracts (under $50 million) that usually carry higher margins.

Maximus is targeting $850 million to $880 million of revenue for next year, including 15% to 20% organic growth. Because of the visibility of its government contracts, Maximus estimates that 83% of expected 2008 revenue is already booked into the backlog.

Even if some spending is cut because of depressed local government budgets, about 70% of the company's sales come from federally mandated programs.

Maximus shares are up more than 27% year to date, but I continue to believe that it offers value at current levels. While failure to sell the entire business was a near-term disappointment to some investors, I believe that focus will shift toward the company's impressive top-line growth and improved profitability in its core outsourcing business.

David Peltier is a research associate at TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Peltier appreciates your feedback; click here to send him an email.

Interested in more writings from David Peltier? Check out his newsletters, TheStreet.com Dividend Stock Advisor and TheStreet.com Value Investor.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
MMS $66.76 0.54%
AAPL $124.43 -1.54%
FB $82.22 -1.18%
GOOG $548.00 -0.73%
TSLA $188.77 -0.94%

Markets

DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs