| Stock (Symbol) | Stock Price | |
Cognizant Technology Solutions (CTSH) |
$67 |
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| Data is as of | Expected to Report | Sector |
August 17, 2015 |
Nov 3 – Nov 9 |
Technology |
| Sharek’s Take | ||
 I have owned IT outsourcer Cognizant Technology Solutions (CTSH) on-and-off for a decade now. It’s a high-teens grower long-term and has typically sold for 19 to 20x earnings the past few years. When the P/E would get high, I’d sell, and buy back when the stock would fall (and the P/E came down). Now I feel CTSH is ready to take it to the next level. The stock market is giving higher valuations to companies that deliver profit growth each year — perennial growers deserve P/Es much higher than their growth rates. I think CTSH is deserving of a P/E in the mid-20s. My Fair Values on this $67 stock are now $73 this year and $84 next year. I will also be more lenient with the stock and alow it to move without pulling the trigger to sell so quickly, as I feel we can grow our money in long-term in the high-teens with a high degree of certainty. |
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| One-Year Chart | ||
 I last sold CTSH last June at $49. Made 53% in a year and a month. Still should have held, and I will learn from that mistake, and try to hold for the long-term. |
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| Earnings Table | ||
 Sales increased 20% last qtr, as profits grew 30%. But I feel the 30% growth won’t be replicated in the near future.CTSH beat the street by a solid 6 cents last qtr, this caused the stock to break out to new highs. Annual Profit Estimates usually rise slightly during the year with this company. Quarterly estimates show teens growth ahead, if CTSH beats by a little it could have high-teens growth, as it usually does. |
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| Fair Value | ||
 I feel CTSH is ready to get more respect from investors, and will now get a higher P/E ratio. |
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| Ten-Year Chart | ||
 I originally purchased CTSH for $3 in 2004, and for many years it was my top holding. Bought and sold multiple times but with mixed success. I would have been better off holding. |
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| 60% in Power Ranking | Bottom Line | |
Growth Portfolio
10 of 25 |
Cognizant Technology Solutions is one of the highest quality growth stocks around, and is deserving of a higher multiple. This is the perfect tech stock for moderately aggressive growth investors. CTSH ranks 10th in the Growth Portfolio and Aggressive Growth Portfolio. Power Rankings. |
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Aggressive Growth Portfolio
10 of 11 |
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