This Chinese IT company is attracting hedge funds and Covestor models (ISS)

Hedge fund Lone Pine Capital recently added to its position in iSoftStone Holdings Ltd (NYSE: ISS), a Chinese information technology (IT) services provider that serves clients in four industry verticals: technology; communications; banking, financial services and insurance (BFSI), and energy, transportation and public sector.

According to CrunchBase, Lone Pine Capital was started in 1997 by Steven Mandel, formerly a managing director and analyst at Tiger Management:

Neither a growth nor a value investor, Mandel looks for good companies run by good people, with stock valuations below what he deems to be their intrinsic value. This search has taken him to high-fliers like Google as well as to homebuilders and foreign banks. Almost half of his assets are invested in non-U.S. stocks. Mandel has 12 investment professionals searching for ideas globally in seven broad industry groups — consumer, financial, health care, tele- communications and media, technology, business services and industrials.”


According to Market Folly, Lone Pine’s recent purchases have

increased their position size in ISS by 50% since the end of the first quarter when they owned 2,542,436 shares.

ISS was recently the beneficiary of an analyst upgrade, according to Forbes:

In a note to clients, UBS analyst Arvind Ramnani raised his rating for the provider of information technology consulting and services to “Buy” from “Neutral” and kept his $21 price target for the shares. The analyst said a survey of iSoftstone clients shows they’re “satisfied” with the company’s services, with 77 percent likely to expand their relationships with iSoftstone and 88 percent willing to recommend it as a vendor.

:The survey also supported our view that ISS is a well-run company with a high-integrity management team,” Ramnani said.

THE BIG PICTURE: He also said the company’s financial situation remains solid as its revenue is expected to grow 39 percent in fiscal 2011 and 29 percent in fiscal 2012; he expected the Chinese IT services market overall to grow fast in coming years.
Ramnani said a recent drop in the stock’s price makes this a good time to buy the shares. The company’s “attractive revenue mix should position it to emerge as a leader among its peers,” he said.

Covestor models that hold ISS as of 6/29 include:

Sources:

“Stephen Mandel’s Lone Pine Capital Buys More iSoftStone (ISS)” Market Folly. http://www.marketfolly.com/2011/06/stephen-mandels-lone-pine-capital-buys.html

“Lone Pine Capital CrunchBase. http://www.crunchbase.com/financial-organization/lone-pine-capital

“ISoftstone shares climb after analyst’s upgrade” Forbes.com, 6/23. https://www.forbes.com/feeds/ap/2011/06/23/business-technology-hardware-amp-equipment-us-isoftstone-holdings-stock_8531917.html