TheStreet rates Xerox a buy for some very good reasons: "The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins."

If it wins the New York Medicaid management business Xerox's revenue would exceed the present $21 billion per year level. Free cash flow for 2014 may run as high as $1.4 billion, nearly 10% of the company's market cap.

Bigger competitors that grow by acquisition -- including Hewlett-Packard and Accenture (ACN) with its nearly $51 billion market cap -- may decide to acquire Xerox before the share price moves much higher.

Shares of Xerox offer investors a current dividend yield-to-price of 2.03%. Patient investors may want to wait to see if shares test the May 15 low of $11.75. At that price the dividend yield increases to 2.13%.

Since shares trade at a trailing price-to-sales (P/S) ratio of less than 0.70, my 12-month price target is $15.40, 25% above the Thursday closing price.

At the time of publication the author had no positions in any of the companies mentioned.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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Marc Courtenay is the founder and owner of Advanced Investor Technologies LLC as well as the publisher and editor of www.ChecktheMarkets.com.

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