WHAT WE DO? WE SELL OPTIONS FOR INCOME. WE USE THAT INCOME TO BUY DIVIDEND GROWTH STOCKS!
CHECK OUR TRADES ON OUR FACEBOOK PAGE OR HERE.


Cognizant Technology Solutions Corporation A (CTSH) above a buy point

Cognizant Technology Solutions Corporation A (CTSH) an Indian IT services company seems to be on its move. It showed up on my screener list as well as in IBD 100 list creating new highs and broke up from a flat base recently. It is a large growth (16 billion) stock and it seems to have a momentum for further growth.

I checked how the stock is trending:

CTSH

A one year chart shows that the stock is in a very strong uptrend which is positive. The stock is a trending stock. The 3 year chart confirms that trend. We can see a choppy downturn during recession period, but that can be ignored as it will be seen on 5 year trend:

CTSH

Five year trend shows that the stock has been trending prior the downturn and it resumed the trend when the overall trend of the market returned north.

CTSH

So the stock is a trending stock. Let’s take a look at fundamental evaluation:

  2009 2008 2007  
Revenue $3,278(m) $2,816(m) $2,135(m) Pass

  2009 2008 2007  
EPS 1.78 1.44 1.15 Pass

  2009 2008 2007  
ROE 20% 22% 24% Fail

Analyst recommendation: strong buy Pass

  12/09 09/09 06/09 03/09  
EPS Surprise +2.40% +9.76% +25.67% +1.88% Pass

  2014 2013 2012 2011 2010
EPS Forecast 3.26 2.85 2.76 2.31 2.07 Pass

EPS Growth Rate (next 5 years) 20.0% Pass

PEG 1.21 Fail

EPS / Industry (TTM) 16.16% 48.7% Fail

Short Interest 1.7 days Pass

Insider Form 4 -181,986 Fail

Weighted Alpha +118.70 Pass

So far the stock has received 8 point out of 12 available. That means that the stock DIDN’T PASS through my fundamental evaluation, so I am not continuing in further evaluations. Originally I was thinking to be lenient on PEG, which seems to be quite low, but such a large negative insider activity prevents me from further evaluating of the stock or being lenient in regards loosing some rules.

The next stock I wish to look at is Atheros Communications (ATHR)





Leave a Reply

Your email address will not be published. Required fields are marked *