The development of new information technologies leads to fresh opportunities for businesses to expand and serve their customer bases. There is a Cambridge, Massachusetts firm that rides the crest of the IT wave, helping companies take full advantage of those opportunities.
Sapient Corporation (NASDAQ: SAPE) provides business, marketing and technology consulting services. The firm's design and implementation expertise are used by information-based businesses and government agencies with needs in e-commerce, customer relationship management, high volume transaction processing, online supply chain development and knowledge management. Clients include BP (NYSE: BP), Harrah's Entertainment (NYSE: HET) and Verizon Communications (NYSE: VZ).
The firm pleased investors last week, when it reported Q3 EPS of three cents and revenues of $141.6 million. Analysts had
been looking for three cents and $135.6 million. In discussing the results, the CEO cited "marked improvements in operating efficiency." Management also guided Q4 revenues to $146 million ($141.27M consensus). SAPE shares popped on the news and then moved into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with two "strong buys," five "buys," three "holds" and a "sell." Analysts see a 17% average annual growth rate through the next five years. The stock's Price to Sales ratio (1.90), Price to Book ratio (3.95) and Sales Growth rate (32.46%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 65% of the outstanding shares. Over the past 52 weeks, SAPE has traded between $5.09 and $8.26. A stop-loss of $6.30 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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