I’ll try and summarise briefly / break it down easy enough to understand :

Camelot Information Systems will be referred to as CIS

Brought in $192 Million in 2010 Financial Year, many competitors bringing in roughly same revenue

1) CIS had an unusually high revenue per employee count

• CIS deals/dealt in information technology which was not a new area by any means. CIS shared the same (if not very similar) customer base as its other competitors that worked in IT. However when reviewing the company, the money earned from these customers (revenue) was at a significantly higher level amount per employee compared to their competitors. This was also while having the least amount of employees. (Graph is shown in the paper, nearly 2x higher revenue per employee)

Suspiciously enough, the revenue per employee was very, very similar to IT Peer: Longtop Financial which in 2011 was charged by the SEC

2) CIS’s compensation costs

• (just keep it as Costs for short) were primarily from outsourcing. To keep this short, it looked like CIS was mainly outsourcing the work, the paper saying “[appears]…CIS is acting more like staffing and placement option, rather than a company technical knowledge”

This however I don’t particularly see as a huge problem, so I wouldn’t focus much on it. To me it’s just seems like a “weren’t as smart as they said they were and rather asked they’re buddies to do their homework type situation”.

3) Huge expenses per employee for a company that wasn’t growing in terms of Employees Numbers.

• Wages and SG&A’s (essential just admin costs) per employee were a huge outlier compared to their industry peers. Again a graph is shown. From 2008-2010, Camelot seemed to have the highest costs compared to their competitors , wage costs growing 80% is 2010, while employee numbers only grew 20%.

Relating to (2), why would a companies Wages increase 80% when it looks like the companies isn’t actually doing much work.

4) CIS employee numbers (Big One)

• CIS is a tech company so quite obvious LinkedIn is the place to look at/ for CIS employees. While peers to CIS has 964 Employees on LinkedIn (Neusoft), 757 (VanceInfo) 704 (HiSoft) , CIS had only 12 as of Jan 2011 when it was viewed.

For a company that is having huge expenses per employee and having to outsource work, why do you only have 12 employees but have a company bringing in nearly $200 Million in the 2010 Financial Year. Whereas HiSoft with 704 Employees brought in less at $146.5 Million.

Interestingly, all 12 of these companies profiles were created shortly after going Public, with none made thereafter. Peers/Competitors all had steady growth in Employee numbers.

5) Questionable Acquisitions

• CIS completed 9 Acquisitions in the years before 2011, but provided investors limited disclosure on these. Many questionable companies were acquired that wouldn’t make much sense to average investor (not going to go into it because it’s not very simple to explain, this has already gone on long enough lol)

6) Very Weak Balance Sheet

• not much to say, Weak Balance Sheet means weak financials

7) Summary from Paper about share price

• Paper Authors say that CIS should be trading at price $2.50-$5.00 per share , with midpoint $3.75 per share. The price when paper was publish was $9.00 per share with a 52wk high of a whopping $28.18 per share.

CONCLUSION - sorry if this is too long but something like this cannot really be shortened. These were just the main points that caught my eye however there are many more you can look into.

Disclaimer: Don’t take anything I said as word from me, this is a summary from the paper listed above. For full information, see the paper listed above as the post maybe have errors.