67 WALL STREET, New York - November 27, 2009 - The Wall Street Transcript has just published its TWST Investing Strategies Report offering a timely review of the sector to serious investors and industry executives. This 55 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Investor Demand for Transparency - High-Liquidity Environment - Undervalued High Quality Companies - Inexpensive Valuation - Areas with Risks - Stretched Balance Sheets - High Returns on Capital - Volume Growth - Multi-Cap Approach - Extreme Value Discipline - Macro Outlook - Value and Momentum - Lower Volatility Growth

Companies include: Belo Corp (BLC); 3M (MMM); A.H. Belo (AHC); Affiliated Computer Services (ACS); American Safety (ASI); Ameriprise (AMP); Apache (APA); Apple (AAPL); Atwood Oceanics (ATW); Bank of America (BAC); Boeing (BA); Brown & Brown (BRO); Bunge (BG); CME Group (CME); Capstead Mortgage (CMO); Chevron (CVX); ChinaCast Education (CAST); Citi Trends (CTRN); Coca-Cola (KO); Cognizant Technology Solutions (CTSH); Conseco (CNO); Consolidated Edison (ED); Costco (COST); Cypress Semiconductor (CY); Danaher (DHR); Duke Energy (DUK); FARO Technologies (FARO); GIII Apparel (GIII); Gannett (GCI); Gilead Sciences (GILD); Goldman Sachs (GS); Goodrich (GR); Google (GOOG); Halliburton (HAL); Harley-Davidson (HOG); IBM (IBM); IDEX Corporation (IEX); IMS Health (RX); JPMorgan (JPM); Johnson & Johnson (JNJ); Kimberly-Clark (KMB); Kinross (KGC); Legg Mason (LM); NIC Inc. (EGOV); Nestle and Alcon (ACL); New York Times  (NYT); Newmont Mining  (NEM); Owens-Illinois (OI); Penson Worldwide (PNSN); Precision Castparts (PCP); Procter & Gamble, (PG); Rambus (RMBS); Research In Motion (RIMM); Roper Industries (ROP); Schlumberger (SLB); Smucker (SJM); Stein Mart (SMRT); Steven Madden (SHOO); Talisman (TLM); Thermo Fisher Scientific  (TMO); Transocean (RIG); UnitedHealth (UNH); Universal Health Services (UHS); Wal-Mart (WMT); Washington Post (WPO); WellPoint  (WLP); Xcel Energy (XEL); Xerox (XRX); Yamana Gold (AUY).

In the following brief excerpt from just one of the in depth interviews in the 55 page Investing Strategies Report, a top tier money manager discusses the background to one of his largest portfolio holdings.

Alexander J. Roepers is the President and Portfolio Manager of Atlantic Investment Management, Inc. ("AIM"), which he founded in 1988. AIM is a $1.5 billion global Registered Investment Advisor, with offices in New York and Tokyo. From 1984 through 1988, Mr. Roepers was director of corporate development at the Thyssen-Bornemisza Group in New York.

In 1983, Mr. Roepers worked on acquisitions at Dover Corporation in New York. From 1980 through 1982, he worked in operations at Dover's Universal Instruments in upstate New York. Mr. Roepers received his MBA degree from Harvard Business School (1984) and holds an undergraduate degree from Nijenrode University, the Netherlands School of Business (1980).

TWST: Would you like to mention any particular companies in this climate?

Mr. Roepers: Affiliated Computer Services (ACS), based in Dallas, with $7 billion in sales. This company is providing IT services for the federal and state governments, localities and for commercial customers. For instance, for E-ZPass they do the qualifications for the tags and the billings. They have call centers in the Philippines, Mexico and India to qualify people for miles reward programs, child support payments, student loan processing, etc. The attractiveness of this company is clear, as over the years various private equity groups, including Texas Pacific Group and Cerberus, have tried to buy them.

Recently, Dell (DELL) agreed to buy Perot Systems, a peer to ACS, for a high multiple. The tremendous rally in cyclical recovery stocks has seemingly made ACS a source of cash, as it is deemed boring - it grows revenues mid- to high single digits with high predictability. Each year, ACS starts with 85% of their sales booked already because they have four- to 10-year terms on most of their contracts that they have. Typically, they win 90% of their renewals because as the incumbent, they've already amortized the upfront investment. They can bid lower than anybody who is trying to steal that contract away from them, and so it's quite a sticky business. They benefit from the trend towards outsourcing, both in the government and in the corporate world for this kind of work. EBIT margins are near 11%. The stock was at about $45 in August, having really gone nowhere for most of 2009 while the market rallied 50% from the March bottom. We bought 3% of the company in August and September.

When Dell announced the acquisition of Perot in early September, it woke people up to the value inherent in these kind of IT services companies. Three weeks later, Xerox (XRX) announced that they had agreed to buy ACS for $63/share, 70% in Xerox stock - 4.935 shares of Xerox for each ACS share - and $18.60 in cash. When the deal was announced, Xerox shares sold off from $9.00 to $7.50 or so, presumably as many XRX shareholders were hoping that Xerox would use its cash flow to pay down debt and buy back shares instead of making a big acquisition. I think XRX shareholders will slowly come around to see that Xerox is doing a strategically sound, well-priced acquisition. At $54 per share, ACS is valued at 8.4 times FY2010 (end June) EBIT. At 10 times EBIT, ACS shares would be at $67.

Our 12-month standalone target for ACS is $77, based on 10 times FY2011 estimated EBIT. Combined, ACS and Xerox will have $22 billion in annual sales with 70% coming from recurring revenues. Xerox just reported Q3-earnings that were better than expected. They also came out with a lengthy description of what ACS-Xerox will mean to investors going forward. You can buy ACS now at $54. ACS-Xerox can earn close to $1 per share in 2011. So in the next six to 12 months, we see Xerox stock trading up to $12. Under this scenario, the value of an investment in ACS stock would go to $77 per share.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 55 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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