What I'm watching
Still love PETS, even at 17. I think it's worth something in the upper 20's. One could say it's PE is high, but remember, it only has 50 cents in earnings...and it's growing at 20+%...
I'm also liking Cognizant Technology (CTSH) which is just hanging out in a basing pattern. I think they're better than Infosys (INFY), and WiPro (WIT) (No offense to the former GM of my former business)... Cognizant is the American-based IT outsourcing company. Offshoring IT is NOT a fad, it's a necessity and will be probably for my lifetime. Sometimes things just make rational sense. Sales grew 53% last year, which ain't bad for a 6 billion market cap! If CTSH grows at just 15% for 10 years, it will make over 4 dollars per share in 2015. At a 30 PE it would be worth 125 bucks a share. It trades at 49. And I gotta think they'll grow faster than 15%!!! That's REALLY conservative.
These two investments seem like long-haul winners to me...
posted by rvb1977 @ 9:41 PM
2 Comments:
Oh, I'm bearish on CTSH. I think the valuation is already beyond its potential, and it made my list of "large caps to underperform in 2006." It looks ready to roll over, but what do I know? Offshoring isn't a fad, but that doesn't mean investing in offshoring isn't. Maybe you can pick it up cheaper, later? I could be wrong.
I'm downright evil on INFY and WIT - I think both will make good shorts sometime in 2006.
I agree that it might be able to be had cheaper. As an almost true trader, it certainly looks like it might be had for low 40's this year.
But the investor in me thinks it's a good stock to hold for some time - I don't see CTSH as a tech stock. Maybe it is, though. I need to think about that and make sure it's not an "old" one if it is. Then it wouldn't get the same valuation it gets today.
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