It is due to report earnings on Thursday and the question is, will that report provide a catalyst to send shares higher? CA Technologies is one of the largest independent providers of IT management software. Its shares first started to climb after reporting third-quarter earnings that surged 32%. The company also announced plans to raise its annual dividend to $1. While it can be argued that the surge was due to the announced dividend, its earnings were also very impressive. The company's revenue has been on an uptrend and most recently grew by 10% to $1.2 billion, the second straight quarter of double-digit growth. With the stock trading at $26 and with a fairly inexpensive price-to-earnings ratio of 13, I would be a buyer ahead of the report on Thursday to add to an existing long-term position. The stock certainly has the potential to reach $30 by year's end, which will represent a premium of 15% above its most recent closing price.
At $1.14 and with a P/E of 1, the market it not betting on much of anything. Nor does anyone suspect that the company can compete long term with Cisco and Hewlett-Packard ( HPQ). So there can only be a surprise to the upside. That said, considering that the downside should be limited from this level ALU just might be enticing enough on reasonable assumptions to expect a share price north of $2 by the end of the year. Follow @rsaintvilus At the time of publication, the author held no position in any of the stocks mentioned. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.