What we said on September 1, 2011:
We believe that the ADSs of Mahindra Satyam are misunderstood and mispriced. Early next year, the ADSs will be canceled and converted to India-traded shares (which trade at a 5% premium at current exchange rates). Another catalyst is Satyam's impending takeover by Tech Mahindra. Satyam has scored contract wins and partnerships with major firms such as EMC, Oracle and Mastercard. Earnings are growing quickly and ROE is now over 30%. This is no longer a turnaround story with fleas. This is an opportunity to buy one of India's leading businesses before it is re-rated as a growth story. Satyam trades at just 1.6x FY2011 sales vs. 4-6x FY2011 for other Indian IT companies.
What happened: Tech Mahindra acquired the rest of Satyam. Shares rose over 60% in one year.