As the world's payment systems shift from paper to pulse, world commerce becomes increasingly dependent on the reliability and integrity of transaction software specialists. Among the leaders in the field is a New York firm that has been serving financial clients for almost thirty years.
Transaction Systems Architects (NASDAQ: TSAI) sells software products and services that make electronic payments possible. The programs process transactions involving ATMs, credit cards, debit cards, wire transfers, home banking services and point-of-sale terminals. Company services involve design, implementation and facilities management. Customers include financial institutions, retailers and e-payment processors. Bank of America (NYSE: BAC) and BB & T Corporation (NYSE: BBT) are two of the big names on the firm's client list. First Data Corporation (NYSE: FDC) is a major competitor.
The company updated its 2007 estimates last month, predicting adjusted EPS of $1.51-$1.80 and revenues of $428-$447
million. Those ranges encompassed the consensus Street views of $1.66 and $436 million. The news helped to keep TSAI shares cycling through a positive seven-week trading channel. The price is currently consolidating at the base of that channel, where oversold Momentum, Stochastic, CCI and MACD technical parameters suggest the potential for a rise back toward the top. The approximate correspondence of the stock's 50-day moving average to the base of the channel backs the rebound notion.
Brokers recommend the issue with four "strong buys," one "buy" and one "hold." Analysts see a 49% growth rate, through the next year. The TSAI PEG ratio (1.2), Price to Free Cash Flow ratio (22.89), Return on Assets (12.33%) and Return on Equity (22.85%) compare favorably with industry, sector and S&P 500 averages.
Institutions hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $28.10 and $38.72. A stop-loss of $29.00 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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