Sapient Corporation (NASDAQ:SAPE) provides business, marketing and technology consulting services. The firm's design and implementation expertise is used by businesses and government agencies with needs in customer relationship management, high volume transaction processing and online supply chain development. Clients include BP (NYSE:BP), Janus Capital Group, Inc. (NYSE:JNS), the National Institutes of Health, Sony Corporation (ADR) (NYSE:SNE), the U.S. Marine Corps and Verizon Communications (NYSE:VZ).
The firm reported fiscal Q3 results last week. They were "preliminary" and subject to change, following Sapient's review of its historical stock-based compensation practices. Still, the numbers pleased Wall Street. Earnings of four cents per share (ex-items) matched the consensus analyst view and revenues of $107.0 million beat consensus ($102.71M). Management also guided Q4 revenues to points "in excess of $110.0 million", versus consensus of $105.74 million. The stock popped on the news and is now consolidating the gain in a bullish "pennant" pattern. Equities frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the issue with two "strong buys", two "buys", four "holds" and four "sells". Analysts see a 25 percent average annual growth rate, through the next five years. The stock's Price to Sales ratio (2.05), Price to Book ratio (3.75) and Sales Growth rate (32.31%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 60 percent of the outstanding shares. Over the past 52 weeks, SAPE has traded between $4.35 and $8.37. If one was to invest in Sapient, a stop-loss of $5.65 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.