Compuware Corporation (NASDAQ: CPWR) provides
software designed to enhance the performance of business computer systems. Products include program suites that test system performance, manage enterprise files and focus application development. Compuware also offers consulting, systems integration, custom programming, maintenance and support services. Ninety percent of the Fortune 100 companies are clients. CA Inc (NYSE: CA) and IBM (NYSE: IBM) are competitors.
The company pleased investors last week, when it guided Q4 EPS to 23 cents and revenues to $337 million. Analysts had been looking for 19 cents and $319.84 million.
CPWR shares
popped on the news and have since been consolidating the gain in a bullish "flag" pattern. Equities frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with one "buy" and two "holds". Analysts see a 12% growth rate, through the next year. The stock's P/E ratio (16.68), Price to Sales ratio (1.77), Price to Book ratio (2.21), Price to Cash Flow ratio (10.81) and Price to Free Cash Flow ratio (11.15) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 79% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $6.10 and $12.56. A stop-loss of $6.80 looks good here. Note that the firm is expected to release Q4 results in mid-May.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.
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