Stocks & Investing
Stocks and InvestingStocks and Investing 
Wed, August 24, 2011
PDFS, VRTU, CACI, LOGM, RMKR, CSGS, Computer Services Stocks Undervalued
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. PDF SOLUTIONS INC (NASDAQ:PDFS), VIRTUSA CORP (NASDAQ:VRTU), CACI INTERNATIONAL INC -CL A (NYSE:CACI), LOGMEIN INC (NASDAQ:LOGM), RAINMAKER SYSTEMS INC (NASDAQ:RMKR), CSG SYSTEMS INTL INC (NASDAQ:CSGS) 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
PDFS PDF SOLUTIONS INC 5.24 9.55 45.10% Undervalued Computer Services
VRTU VIRTUSA CORP 14.3 19.69 27.40% Undervalued Computer Services
CACI CACI INTERNATIONAL INC -CL A 52.16 56.2 7.20% Undervalued Computer Services
LOGM LOGMEIN INC 29.59 37.74 21.60% Undervalued Computer Services
RMKR RAINMAKER SYSTEMS INC 0.8502 2.45 65.30% Undervalued Computer Services
CSGS CSG SYSTEMS INTL INC 13.2 21.04 37.30% Undervalued Computer 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.
PDF SOLUTIONS INC (NASDAQ:PDFS) - PDF Solutions, Inc. provides infrastructure technologies and services for the design and manufacture of integrated circuits(IC) in Asia, the United States, and Europe. It offers manufacturing process solutions that include process research and development, and process integration and yield ramp; volume manufacturing solutions; and design-for-manufacturability (DFM) solutions, such as logic DFM, circuit level DFM, memory DFM, and pdBRIX Physical IP solutions. The company also offers characterization vehicle (CV) infrastructure, which includes CV test chips, pdCV analysis software, and pdFasTest electrical wafer test system; Yield Ramp Simulator software that analyzes an IC design to compute its systematic and random yield loss; and Circuit Surfer software, which estimates the parametric performance yield and manufacturability of analog/mixed-signal/radio frequency blocks. In addition, it provides pdBRIX platform, which includes software for identifying and developing a set of physical IP building blocks that are tailored to a given manufacturing process and target product application; dataPOWER YMS platform that collects yield data, loads, and stores it in an integrated database and allows product engineers to identify and analyze production yield issues; maestria FDC software, which provides fault detection and classification capabilities to identify sources of process variations and manufacturing excursions by monitoring equipment parameters; and YA-FDC service and software platform that allows online modeling to create real-time virtual measurements of final product attributes during processing. PDF Solutions sells its technologies and services through direct sales force, sales representatives, and strategic alliances to integrated device manufacturers, fables semiconductor design companies, and foundries. The company was founded in 1992 and is headquartered in San Jose, California.
VIRTUSA CORP (NASDAQ:VRTU) - Virtusa Corporation provides information technology (IT) services to clients across North America, Europe, the Middle East, and Asia. Its IT consulting services include assessment and planning services comprising application inventory and portfolio assessment, business/technology alignment analysis, IT strategic planning, and quality assurance process consulting; architecture and design services that include enterprise architecture analysis, technology roadmaps, product evaluation and selection, and business process analysis and design; and governance-related services, including program governance and change management, program management planning, and IT process/methodology consulting. Virtusa also offers technology implementation services comprising application development, package implementation and integration, software product engineering, business process management implementation, and enterprise content management; systems consolidation and rationalization, technology migration and porting, and Web-enablement of legacy applications; data warehousing services, such as data management and transformation, and business intelligence, reporting, and decision support services; and testing services that include testing frameworks, automation of test data and cases, and test cycle execution. Its application outsourcing services include application and platform management services, including production support, maintenance and enhancement of custom-built and package-based applications, and ongoing software engineering services; infrastructure management services comprising systems and database administration, and monitoring; and quality assurance management services. It serves communications and technology, banking, financial services, insurance, media, and information industries. The company was formerly known as eRunway, Inc. and changed its name to Virtusa Corporation in April 2002. Virtusa was incorporated in 1996 and is headquartered in Westborough, Massachusetts.
CACI INTERNATIONAL INC -CL A (NYSE:CACI) - CACI International Inc, through its subsidiaries, provides information technology (IT) and professional services to the U.S. federal government and commercial markets in North America and internationally. It offers enterprise IT and network services, such as design, establishment, management, security, and operation of client infrastructure, as well as operational, analytic, consultancy, and transformational services; data, information, and knowledge management services; and business system solutions that consist of consulting and software development/integration services for financial, procurement, human resources, supply chain, and other business domains. The company also provides logistics and material readiness services that plan for, implement, and control the flow and storage of goods, services, and information, as well as develops and manages logistics information systems, specialized simulation, and modeling toolsets; and C4ISR services, such as rapid response services, including command, control, communications, computers, intelligence, surveillance, and reconnaissance programs in support of military missions. In addition, it offers cyber security services that support preparing for, protecting against, detecting, reacting, and responding to the cyber threats; integrated security and intelligence solutions, which close gaps between security, intelligence, and law enforcement to address threats to national security; and program management and system engineering and technical assistance services to government program offices. Additionally, it offers planning, design, implementation, and management solutions that resolve specific technical or business needs for commercial and government clients in the telecommunications, education, financial services, healthcare services, and transportation sectors internationally. The company was founded in 1962 and is headquartered in Arlington, Virginia.
LOGMEIN INC (NASDAQ:LOGM) - LogMeIn, Inc. provides on-demand, remote-connectivity solutions to small and medium-sized businesses, information technology (IT) service providers, and consumers in the United States and internationally. Its services include remote user access services, which allow users to access computers and other Internet-enabled devices to continue working while away from the office or to access personal systems while away from home; and remote support and management services that are used by internal IT departments, and external service and support organizations to deliver support and management of IT resources remotely. The companys remote user access services comprise LogMeIn Free, a free remote access service; LogMeIn Pro, a premium remote access service; LogMeIn Hamachi, a hosted virtual private network service that sets up a computer network among remote computers; and LogMeIn Ignition, a premium service that delivers access to remote computers, which subscribe to LogMeIn Free and LogMeIn Pro. Its remote support and management services include LogMeIn Rescue, a Web-based remote support service to support remote computers and applications, and assist computer users via the Internet; LogMeIn Rescue+Mobile, an extension of LogMeIn Rescues Web-based remote support service to remotely access and support smartphones; LogMeIn Central, a Web-based management console; and LogMeIn Backup, a service that subscribers install on two or more computers to create a backup network. The companys solutions are used by businesses and IT service providers to deliver end-user support, and to remotely access and manage computers and other Internet-enabled devices; and used by consumers and mobile workers to access computer resources remotely. It has a strategic agreement with Intel Corporation. The company was formerly known as 3am Labs, Inc. and changed its name to LogMeIn, Inc. in March 2006. LogMeIn, Inc. was founded in 2003 and is headquartered in Woburn, Massachusetts.
RAINMAKER SYSTEMS INC (NASDAQ:RMKR) - Rainmaker Systems, Inc. provides sales and marketing solutions, combining hosted application software, and execution services to enterprises operating in the computer hardware and software, telecommunications, and financial services industries. Its services include service contract sales and renewals, software license sales, subscription renewals, and warranty extension sales; lead generation, qualification, and management; and hosted application software for training sales. The companys Rainmaker Revenue Delivery Platform combines proprietary technology platform, including hosted application software; database of corporate buyers of technology products and services; data development and analytics services; and sales and marketing execution services. Its Rainmaker Solutions consist of data integration and enhancement, marketing strategy development and execution, and customer deliverables and integration. The company markets its service through a direct sales force of representatives. It operates in the United States, Canada, the United Kingdom, and the Philippines. Rainmaker Systems, Inc. was founded in 1991 and is headquartered in Campbell, California.
CSG SYSTEMS INTL INC (NASDAQ:CSGS) - CSG Systems International, Inc. provides outsourced customer care and billing solutions primarily to the cable and direct broadcast satellite industry in North America. It offers Advanced Convergent Platform, a customer care and billing solution, and related services and software products. The company's products and services enable and automate various aspects of a service providers customer interactions, ranging from call centers, on-line Internet access, emails, text messages, interactive messaging, kiosks, service technicians, and monthly statements. In addition, it licenses various software products, including ACSR and Workforce Express, which allow clients to roll out new products, such as high-speed-data, telephony, and commercial services. The company also offers its services to utilities, healthcare, home security, financial services, and content distribution industries. CSG Systems International, Inc. was founded in 1994 and is headquartered in Englewood, Colorado.
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