David Einhorn Is Back In Xerox (XRX)

January 18, 2012 12:24 PM EST
An old fan has warmed up to Xerox Corporation (NYSE: XRX) again.

David Einhorn told Greenlight Capital clients in a letter dated January 17, 2012 that the fund has re-established a position in the document company.

The firm is positive on the company's 2010 acquisition of Affiliated Computer Services, saying that deal has allowed the company to sell more valued-added services.

This is Greenlight's second purchase of the stock since that takeover. The first time around they bought the stock at $9.35 and sold it for a modest gain following concerns about the company's exposure to the Japanese earthquake. These issue now appear fully discounted, and they have re-established a position at $7.61, or less than 8x 2012 estimates.

Xerox signed a signification amount of new multi-year outsourcing service contracts in the first nine months of 2011 and has been aggression cutting cuts in the legacy ACS organization, the firm highlights.

Xerox sees longer-term revenue growth of over 6 percent and adjusted EPS growth of 10-15 percent. Also, the firm expects the $1-$1.4 billion in share repurchase this year to take a lot of stock out of the market.

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