CA (CA) is one of the major enterprise IT outfitters, providing information technology management software to firms that are focused on securing that administering their networks. The firm has made a big transition from primarily selling computer hardware to focusing on higher-margin businesses like software and integration services. That shift has proven prescient, especially as more and more PC hardware firms pile into the enterprise IT arena.
CA has also done a good job of positioning itself in line with the buzzwords of the day: namely cloud computing and virtualization. As those technologies continue to grow in popularity in corporate America, CA should continue to push its sales numbers higher, particularly with a customer list that already includes 99% of the Fortune 1000. That said, mainframes remain an integral part of CA's business (around 60% of sales), a factor that could become a drag as traditional IT customers continue eschewing mainframes in favor is less centralized computing options.The firm remains in good financial shape, with a deep net cash position that accounts for nearly a tenth of CA's market capitalization. The firm's Oct. 23 second-quarter earnings call could be a big catalyst for upside in the next month. To see all of this week's Rocket Stocks in action, check out the Rocket Stocks portfolio at Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV