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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.

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-- Written by Jonas Elmerraji in Baltimore.


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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to and maintains the website, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.

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