Azim Premji?s Wipro has joined Infosys and Satyam in a slow journey towards Watten Buffett?s menu although these are ?not necessarily stocks? the world?s third richest person ?has bought or ever personally plans to buy?.
Standard and Poor?s, one of the world?s biggest investment services providers that compiles a list of stocks meeting the legendary investor?s appetite twice a year, has named the three of the biggest names in the Indian IT space in its latest model portfolio. But a high degree of market volatility and expensive valuations have kept Buffett from buying into Indian firms so far.
The selection criteria included a minimum market capitalisation of $ 500 million, owner earnings of at least $250 million (revised from $ 50 million previously), net margins of at least 15% for trailing 12 months, and projected cash flow per share being greater than the current market price for each stock. Besides, returns on equity should be at least 15% for previous quarter and in every year for the last three years, US-based business magazine BusinessWeek, published by McGraw-Hill that also owns Standard & Poor?s, said in its latest issue quoting analysts.
The American depositary receipts of the three Indian IT giants have been named alongside global majors Microsoft, Oracle, Ericsson, Cisco Systems, Diageo, China Mobile and SAP.
The list also includes 3M Company, Altria, British American Tobacco, Mcgraw-Hill Company and Qualcomm. Standard & Poor?s has been updating its S&P Promising Growth Portfoio twice a year?in February and August?since 1995 and it includes stocks reflecting the criteria that Buffett has emphasised in the past, although ?these are not necessarily stocks that Buffett has bought or ever personally plans to buy?.
The February list had included Infosys and Satyam Computers apart from US-based Cognizant Technology, which has significant exposure India, with a majority of its work force and operations being in the country.