- Wells Fargo Securities
Now what? More onerous terms for professional (H-1B and L-1) visa holders
THOUGHT OF THE WEEK - President Elect-Donald Trump. Where did the data scientists go wrong.Was it the data or the algorithm? Probably some of both. It suggests to us that "analytics" remains part art, part science. So what do we see potentially happening in a Trump Administration? Repatriation of cash.possibly.so maybe some special dividends and share repurchase increases. Reduced regulations, especially for banks and healthcare/life sciences.most likely. More onerous terms for professional (H-1B and L-1) visa holders via either a higher wage requirement or limit on availability.possibly.especially if Senator Sessions (R-AL) takes an active role in the Administration, but the impact likely would not be felt immediately.
So for the India-centric providers, reduced regulation for banks and other industries could free up discretionary spending and release the pressure felt on 2016 revenue growth in several key verticals, although renewed visa risk could cause the providers to accelerate their journey to being more global providers, which may create a modest headwind to margin. So a mixed bag for Cognizant (CTSH) and Infosys (INFY), not the negative one (in our view) that was the market's initial reaction. For the government service providers, will he follow through on his comments around rebuilding defense.maybe, but we are more likely to see incremental budget dollars for Homeland Security, Veterans Administration and Commerce departments, which could be a plus for some including CSRA (CSRA). A lot depends on if we see a populist President as seen on the campaign trail, or a business friendly compromiser.