Analysis of CA Technologies

Company: CA Technologies

Business: Software and Service for large enterprises. The have a significant cloud focus and are offering a broad, broad range of software solutions for all kind of problem.

Active: As any software company world wide.

Not that long ago I read someone saying something in line of: If you want to diversify then just buy a company that are active world wide. They themselves are already diversified with a minimised risk. And if you then buy a couple of them in various branches then there is hardly any longer a risk in the long run.

P/E: 12.6




Here we see a company software/technology company with a surprisingly low P/E of 12.6. The book value is also not too bad with its 2.2. With the Graham formula we are getting a value that is slightly above with its 27 compared to the 22.5 for being very safe. They are getting almost 20% out on their sales which should be ok. The growth for the last five year have been mediocre though with only 2.4%. According to Lynch and Graham a motivated P/E should then be around 11-12 meaning that with its current P/E of 12.6 the stock is fairly valued on the market. They are a bit pushing research by spending 55% of the earnings on that which means they will stay on top of things. The dividends are very low with only 1.6% which is only 20% of their earnings so it could easily be pushed higher.

Conclusion: Seems to be a solid company that maybe for a software company is even cheaply valued by the market. They have solid earnings and if they would push up their yearly growth slightly higher then I would find it a very interesting company. Today I would not invest in it because I do not see it as being a bargain.