Stocks & Investing
Wed, August 24, 2011EDGW, DRCO, MATR, NCIT, CCO, CHRM, Computer Services Stocks Undervalued
Published in Stocks and Investing on Wednesday, August 24th 2011 at 6:01 GMT by WOPRAI
August 24, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Computer Services sector and these stocks are the most undervalued as of today. EDGEWATER TECHNOLOGY INC (NASDAQ:EDGW), DYNAMICS RESEARCH CORP (NASDAQ:DRCO), MATRIA HEALTHCARE (NASDAQ:MATR), NCI INC-A (NASDAQ:NCIT), CLEAR CHANNEL OUTDOOR-CL A (NYSE:CCO), CHARM COMMUNICATIONS INC-ADR (NASDAQ:CHRM) are all expected to go Up as they are Undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.
The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:
Symbol Company Name Last Close Fair Value Valuation Industry
EDGW EDGEWATER TECHNOLOGY INC 2.52 4.81 47.60% Undervalued Computer Services
DRCO DYNAMICS RESEARCH CORP 10.4 12.73 18.30% Undervalued Computer Services
MATR MATRIA HEALTHCARE 5.35 9.8 45.40% Undervalued Computer Services
NCIT NCI INC-A 15.885 28.13 43.50% Undervalued Computer Services
CCO CLEAR CHANNEL OUTDOOR-CL A 10.5 19.94 47.30% Undervalued Advertising - Marketing Services
CHRM CHARM COMMUNICATIONS INC-ADR 11.5 12.9 10.90% Undervalued Advertising - Marketing Services
Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.
Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.
EDGEWATER TECHNOLOGY INC (NASDAQ:EDGW) - Edgewater Technology, Inc. operates as a management consulting firm primarily in North America. The company offers business advisory services with a focus on the facets within mergers and acquisitions for private equity, venture, and office of the chief financial officer; and strategic planning, organizational integration and change, and special projects, as well as industry driven management consulting services. It also provides analytics services for the implementation of practices through performance metrics and benchmarks, dashboard visualization of financial and operational data, and foundation of predictive analytics. In addition, the company offers enterprise information management services, such as master data management and data governance practices; data conversion, transformation, and quality strategies forms; and data platforms for analytics, business intelligence, and enterprise applications. Further, it provides enterprise application services consisting of business transformation with enterprise application platforms, enterprise performance management solutions, advanced customer relationship management solutions, and enterprise resource planning solutions and services; and technology services comprising technology management services, technology architectures and roadmaps, and specialized technical strategies and solutions, as well as custom disaster recovery, and business continuity design and implementation services. The company offers its services to CPG/manufacturing, discrete and process manufacturing, energy/utilities, healthcare, hospitality, insurance, retail, and travel/entertainment industries. Edgewater Technology, Inc. has strategic alliances with Cognos; IBM; Informatica Corporation; ISO Insurance Technology Solutions; Google; Microsoft Corporation; Optical Image Technology; Oracle America, Inc.; SAP; Sun Microsystems; UBMatrix; VMWare; and Webtrends. The company was founded in 1992 and is headquartered in Wakefield, Massachusetts.
DYNAMICS RESEARCH CORP (NASDAQ:DRCO) - Dynamics Research Corporation provides management consulting, engineering, technical, and information technology (IT) services and solutions to federal and state governments. It provides Web-based collaborative decision making tools and facilities that enable participants in various locations to participate in the transformation process; a set of services for managing and implementing IT infrastructures for government organizations; and training solutions that include training/task analysis, high performance team training, Web-based training, and automated training management. It identifies, develops, and delivers various additional human performance improvement solutions, including electronic performance support systems, job/task redesign user interface change, organizational redesign, and resource reallocation; develops functional Web-based training courseware; and develops and applies modeling and simulation techniques. The company offers automated case management solutions that focus on state health and human services; a set of services to support the management of programs throughout their life cycle, providing expertise in program management, business, cost, financial management, acquisition management, engineering and logistics services, audit support and remediation services, and communications services and training; provides developmental research supporting the establishment of the Item Unique Identification (IUID) umbrella program for Air Force depots; and strategic human capital, workforce planning, and performance management solutions. It also provides information assurance and cyber security services, such as management support, operational support, and technical support; and program management, program evaluation and analysis, clinical support services, project coordination, and administrative services for various healthcare programs. The company was founded in 1955 and is headquartered in Andover, Massachusetts.
MATRIA HEALTHCARE (NASDAQ:MATR) - Matria Healthcare, Inc. (Matria) provides integrated programs and services focused on wellness, disease and condition management, productivity enhancement and informatics. This suite of services, under the brand Health Enhancement, is designed to reduce health-related costs and enhance the health and quality of life of the individuals it serves. The Company provides services to self-insured employers, private and government sponsored health plans, pharmaceutical companies and patients. Its clients are primarily Fortune 1000 companies that self-insure the medical benefits provided to their employees, dependents and retirees. Its health plan customers are regional and national health plans, as well as government-sponsored health plans, such as state Medicaid programs.
In December 2005, Matria signed a definitive merger agreement to acquire CorSolutions Medical, Inc. (CorSolutions), another provider of disease management and related services to employers, health plans and government-sponsored healthcare programs. At the same time, the Company decided to divest Facet and its foreign diabetes service operations in Germany. Facet is a designer, developer, assembler and distributor of products for the diabetes market. It has 30% to 50% of the world market share in each of the three major Microsampling product lines, the majority of which are used to obtain blood samples for testing blood glucose levels: standard lancets, lancing devices and safety lancets. Facet operates from facilities in Marietta, Georgia, McDonough, Georgia, and Northhampton, England. Its products are shipped primarily to North and South America, Europe and Asia. The foreign diabetes division provides diabetes products and supplies and certain value-added services directly to patients in Germany through its main facilities in Neum?nster and Dresden, Germany and depots maintained in physician offices and clinics. Most revenues are received directly from the German national healthcare system.
Approximately 25% of Facet's revenues and 100% of the revenues from the Company's foreign diabetes division were derived from customers outside of the United States in 2005. Approximately 49% of the combined revenues for Facet and its foreign diabetes division in 2005 were from customers in Germany.
Health Enhancement involves multiple and integrated programs and services that help participants change unhealthy lifestyles that lead to chronic diseases, improve self-care skills and compliance with plans of care and become better educated consumers of healthcare services. This business line has 50 service centers that serve participants and patients throughout the United States.
Matria's online, interactive wellness programs address issues, such as smoking cessation, weight loss, exercise, healthier diet, stress relief, healthy aging and productivity enhancement. These programs are designed to help employees and health plan members live healthier and longer lives while reducing their healthcare costs and increasing their productivity.
The disease and condition management programs have focused on the costly medical conditions, including, without limitation, diabetes, coronary artery disease, congestive heart failure, asthma, chronic obstructive pulmonary disease, depression, chronic pain, hepatitis C, cancer and high-risk pregnancies. With the acquisition of CorSolutions, Matria has expanded its disease management offerings to include many less common chronic conditions. The Company also provides absence management program and the capability of integrating disease management programs with a customer's disability carriers.
Emphasis is put on a multidisciplinary approach to care that involves clinicians working with physicians to oversee their patients' adherence to treatment plans. Matria focuses on the management of patients between visits to their physician, the improvement of patients' compliance with their physicians' care plans and the avoidance of controllable and costly events, such as emergency room visits and hospital admissions. The disease and co
NCI INC-A (NASDAQ:NCIT) - NCI, Inc. provides information technology (IT), engineering, logistics, and professional services and solutions to federal government agencies. The company offers enterprise systems management services, which include infrastructure operations and management, outsourcing and managed services, infrastructure consolidation and modernization, public/private cloud computing, application and network management, and network monitoring and performance evaluation, as well as network design, implementation, and migration. NCI also provides network engineering services comprising architecture development and design, disaster response planning and recovery, network configuration, network security evaluation, protocol and topology selection, requirements analysis, routing design, and vulnerability assessment, as well as installation, test, and evaluation. In addition, it offers cybersecurity and information assurance services comprising intrusion detection system/intrusion prevention development, certification and accreditation, policy and procedures development, cybersecurity fusion centers, public key infrastructure implementation, computer forensics, risk and threat assessment, security awareness and training, and security test and evaluation; and software development and systems engineering services consisting of agile and open source software development, database design and management, enterprise portal implementation, legacy system integration, project planning and management, software/systems development, analytical computing solutions, data warehousing/mining, advanced graph analytics, information sharing and collaboration, and high performance and grid computing, as well as integration, test, and evaluation. Further, NCI provides program management, acquisition, and lifecycle support; engineering and logistics services; health IT/medical transformation support; and training and simulation services. The company was incorporated in 2005 and is based in Reston, Virginia.
CLEAR CHANNEL OUTDOOR-CL A (NYSE:CCO) - Clear Channel Outdoor Holdings, Inc., an outdoor advertising company, owns and operates advertising display faces worldwide. It provides advertising through billboards, street furniture displays, transit displays, and other out-of-home advertising displays, such as wallscapes, spectaculars, neons, and mall displays. The company serves retail, telecommunications, banking and financial services, gambling and amusement, food and food products, and automotive industries. As of December 31, 2009, it owned and operated approximately 834,000 advertising displays. The company is headquartered in San Antonio, Texas. Clear Channel Outdoor Holdings, Inc. is a subsidiary of Clear Channel Communications, Inc.
CHARM COMMUNICATIONS INC-ADR (NASDAQ:CHRM) - Charm Communications Inc. operates as a television advertising agency in the Peoples Republic of China. It offers a range of television advertising agency services from planning and managing advertising campaigns to creating and placing advertisements. The company places advertisements for its clients on an array of television channels, including CCTV and satellite and regional television channels, as well as on other media platforms, such as Internet and out-of-home media. It also engages in media investment management through identifying, securing, and selling television advertising resources. In addition, Charm Communications offers branding and identity services, which include the provision of creative design, development, and production of advertisements and marketing consulting services to advertising clients. The company is headquartered in Beijing, the Peoples Republic of China.
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