What's it worth? CSCO CTXS CSC CPWR ACOM
Glen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Hi, my name is Glen Bradford and I am having an absolute fantastic time pricing the S&P500. Let's take a look at what I think your company is worth.
368. Cisco Systems (NASDAQ: CSCO) is a company that I've studied the basics as I pursued my CCNA, which is a certification that they offer. This is another company that you have to pay attention to the cash balance. Ignoring the cash, the company is fairly valued on a P/E basis, but cash actually matters. Not only that, but I think that Cisco's margins are stabilizing and is a slow growth stalwart. Target: $20-$25. I'm surprised this ever got down to $15. Those were 2009 crisis prices! I think Cisco is heading higher from here. Outperform.
369. Citrix Systems (NASDAQ: CTXS) is more than twice as expensive as Cisco on an earnings basis. I think that their growth is priced in. Target: $67-$77. I really like Citrix but it is out of my price range for now. They are growing in the high teens and I don't really see a 1% growth miss as a tangible miss. I don't really see good cause for analysts to come in at higher prices given the present valuation and support various investment thesises that suggest even higher prices. Thus I think that we won't be seeing $90 in the next 2 years. I could be wrong, markets have a tendency to get irrational and stay that way for long durations of time. This is the kind of company that I'd never redthumb because I do expect it to beat the S&P500 in the long run, but in the short run it's just too pricey.
370. Computer Sciences Corp (NYSE: CSC) has recently touched down at $25 where it bottomed in 2009 during the height of the financial crisis. The stock surged over 20% February 8th after announcing great earnings. I think that the downside here has been overplayed. Target: $35-$45. 20% day surges on news like that tend to follow through over time into higher prices in a sustainable fashion. I'd definately recommend taking a look at their call transcript if you own CSC. When I look at this company I see normalized earnings of around $3.50. That puts my low end target at a personal multiple of around 10x which I think is reasonable.
371. Compuware Corp. (NASDAQ: CPWR) has seen its share of declining revenues, but more or less has maintained the same level of profitability. Analysts continue to hold their price trrgets around $10. I look at this company and I see a bloated price tag that is mostly held up by peer analysis. It isn't for me, but for those who do comparable analysis I do have a price target. Target: $8.50-$9.50. If you do choose to own Compuware, expect volatility in the quarterly guidance. Take a deeper look into some of the questions brought in by analysts at their last quarterly conference call.
Extra: My stock market mentor Doug Hall advised me that he owns Ancestry.com (NASDAQ: ACOM), which warrants that I take a look. Appears that they started a buyback in October, which is pleasant because the price then was sub-$25 and we are now over $30. If they're projecting top line growth FY 2012 in the 14-19% range, grew revenue around 30%+ in 2011, grew revenue 33% in 2010, 13% in 2009 and 18% in 2008.
That's all for now, email me your picks at globalspeculation at gmail.com.
Glen has no positions in any of the companies mentioned.