Watch Out Lancelot: Slowdown Looms in Camelot

In addition to the big names I want this blog to spotlight some smaller up-and-comers that don’t necessarily receive as much ink, bringing me to Camelot Information Systems (NYSE: CIS) which just released 2010 results that were quite impressive but 2011 outlook that hinted it may soon be sparring with harder times. The IT services provider, whose shares have largely traded sideways since its IPO late last year, reported more than 60 percent growth in 2010, banking in particular on strong demand from China’s fast-growing financial services sector. (results release) Perhaps in light of growing warnings that the same financial services sector may be poised for a significant correction, Camelot forecast its growth would slow sharply this year to about half of 2010’s level, though it failed to provide any explanations. In any other situation 30 percent growth wouldn’t be all that bad. But in Camelot’s case, its current PE ratio of more than 50 times means this company may need some time to fill its richly valued new shoes in New York.