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Fastest Growing Tech To Sustain 45 Degrees Uptrend?



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Feb 02 2007
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Cognizant Technology Solutions Corp. (Nasdaq: CTSH, stock) will announce its’ fourth-quarter earnings next Monday, Feb-5-2007, before market opening. Cognizant Technology Solutions Corporation (Cognizant) is a provider of custom information technology (IT) consulting and technology services, as well as outsourcing services for Global 2000 companies located in North America, Europe and Asia. The Company’s core competencies include technology strategy consulting, complex systems development, enterprise software package implementation and maintenance, data warehousing and business intelligence, application testing, application maintenance, infrastructure management and vertically oriented business process outsourcing (BPO).

Cognizant is one of the America’s 25 fastest-growing public technology companies (in terms of annual sales gains), according to
Forbes 25 Fast Tech, outperformed the Nasdaq Composite over the past year. In early November 2006, Cognizant announced plans to invest over $200 million through the end of 2008, expanding its facilities in India

Rating Indicators for CTSH:

  • Wall Street consensus : 0.43
  • StockScouter rating : 10 / 10
  • Whisper Number for this stock : 0.45
  • Schaeffer rating for this stock : 7 / 10
  • Power Rating : 5 / 10
  • Insider Trading (last 52 weeks) : ($26.77M)
  • Zacks Analysts Rating: Moderate Buy
  • Option Trading: Apr 2007 85 Call
  • Implied Volatility (IV) for Mar 2007 $85 Strike : 29.05%

Sales, Income & Growth – For the past 12-months, Cognizant registered $1.26 Billion sales versus the industry’s $10.71 Billion. Income amounted to $220.94 Million against the industry’s $458.53 Million. While Cognizant 12-months sales growth is at 59.0%, the income growth is in the healthy region of 50.30% (the same industry sector sales growth at 31.90% with income of 33.10%).

Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 17.6%. Cognizant has a debt/equity ratio of 0 (zero) compare to industry’s ratio of 0.25

Stock Resistance & Support Level – The resistance is at 85.54 (52-week high) while the first level support is at 80.20 (50-day moving average).

Risks – At 57.72, the price-to-earnings multiple is higher than the average of the stocks of the same sector.

I like this stock because its’ earnings growth in the past year is holding steady compared to earnings growth in the past three years. This is probably one of the performing technology stocks which consistently beat the earning estimate for the past 8 (eight) quarters. Did you notice the almost 45 degrees 1-year chart of this guy?

Do you know that of all stocks on the public markets, Cognizant Technology (Nasdaq: CTSH, stock), Google (Nasdaq: GOOG, stock), Coldwater Creek (Nasdaq: CWTR, stock), and First Marblehead (NYSE: FMD, stock) are four of the most aggressive growers and for the next five years, analysts are expecting each to grow at least 25% per annum?



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