| Stock (Symbol) | Stock Price | |
Cognizant Technology Solutions (CTSH) |
$103 |
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| Data is as of | Expected to Report | Sector |
February 28, 2014 |
May 5 – May 9 |
Technology |
| Sharek’s Take | ||
 Cognizant Technology Solutions (CTSH) should have accelerated profit growth throughout 2014. CTSH is a 20% grower, but had been growing profits 15% the past two quarters. Estimates now show profit growth of 22% and 20% the next two quarters, and the company usually beats by a little. What’s fueling the growth is a stronger Europe, which has 32% revenue growth last qtr (vs 18% in North America). I’m takaing my Fair Value P/E on CTSH up from 21 to 23. This buy-and-hold 20% grower has decent upside for investors who are willing to hold till 2015. |
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| One-Year Chart | ||
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| Earnings Table | ||
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| Fair Value | ||
 Although business is good, this stock is within 10% of its 2014 Fair Value. Theres’ good upside to 2015 so right now this is more of a buy-and-hold stock as I don’t see CTSH gaining much this year. |
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| Ten-Year Chart | ||
 This stock used to be my #1 holding around a decade ago. It would deliver 40% to 60% profit growth each quarter — and the stock would go up that much each year. |
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| 60% in Power Ranking | Bottom Line | |
Growth Portfolio
25 of 26 |
Cognizant Technology Solutions should see solid 20% profit growth this year, and is considered to be a stock that can compound at 20% a year into the future. But with 2014 upside of only 9%, this stock doesn’t rank high on my Power Rankings. CTSH is ranked 25th of 26 stocks in the Growth Portfolio Power Rankings and is not a fit for the Aggressive Growth Portfolio right now. |
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Aggressive Growth Portfolio
N/A |
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CTSH has had a good run. I’ve owned it on-and-off since 2004. recently bought it back at $64 in May 2013. The stock’s close to being fairly valued here, if I didn’t own it I would wait for a better entry point.
Revenue grew 21% last quarter, but profits increased only 15%. Going forward these figures should be slightly over 20%.