CACI - LVS Advisory - Booz Allen Hamilton: Weighing The Trade Offs Between Quality And Value
2024-04-21 06:40:00 ET
Summary
- Booz Allen Hamilton serves as an interesting example of weighing the trade-offs between "quality" and "value" when picking stocks.
- Booz Allen's deep moat is sustainable - there is a significant incumbency bias in government contracting, especially when it comes to IT.
- Booz Allen has an unfair competitive advantage in government contracting, and this is characteristic of a great business, and it shows the in the numbers.
- Booz Allen deserves to trade a higher valuation multiple because it has superior technology capabilities, a more robust organic growth strategy, a cultural advantage, is more disciplined in its capital allocation, and generously rewards shareholders with buybacks and dividends.
The following segment was excerpted from this fund letter.