CA, Inc. (CA)

fool

fundamentals and momentum; favorable StockScouter rating

While I feel this stock will grow over the next year, that growth will most likely not be better than the S&P 500 over that same time span.

CA deals with a wide variety of softwares used in IT to better manage their infrastructure. In particular IT security management and storage management. Since 2007 management has made a concerted effort to help their customers better control and manage their resources instead of replacing them. In a hard economic cycle, reorganizing instead of replacing should be a preference of many business owners as a way of saving money.

2009 sales were at $4,271M which was just shy of equaling 2008 sales which were $4277M. I suspect sales will stay flat through their 2010 FY with perhaps a slight bump should the economy rebound quickly in the later half of 2009. But my expectations are that growth of sales won't be reflected until their 2011 FY which begins in April of 2010.

So increase in stock price will most likely occur, but that increase I don't believe will exceed the gains posted by the S&P 500.

Conservative picks in case the market stays down.

This company is dead. Cutting jobs in the US and hiring abroad to increase profits. No innovation. No flagship product. Even the company name CA was a horrible choice (abbreviation for California). Trying foing a Google search on the company name and see what you get (garbage). Unfortunately, there aren't any pieces to this company that someone would want to buy or investors could get some money via being acquired. Swainson has made his millions; spent a ton on SAP; and surrounded himself with more high-priced incompetents...and the only thing he has to show for it is the EITM strategy (actually stands for Executives In The Money) and is executed by putting Employees In The Street!

IMHO after more than 10 years in the company (no longer there now); CA will be around for a long while .. why? Simply because it's mainframe business is a cash cow. Mainframe users typically do not change their MF software unless there are very compelling reasons - just too painful and risks are too high for the CIO. More than 50% of their revenue are from MF. As far as Open Systems are concerned - in general quality is simply not up to mark even for their core open system solutions and they are simply not good at integrating, developing and implementing them. Once a while after buying good software their sales may go up a little otherwise it would be a struggle..So bottomline, they should not be posting big losses but their numbers would be fairly stagnant. A major achilles heel is its management - it is a sad thing to see incompetent folks move up (those that are the "Yes man" category and are well verse in office politics) while the really good performers left behind and leaving the org.

CA has been sitting at the bottom of the pack of information technology companies for a number of years, but things are looking up. The executive leadership team is finally starting to get a hold of the situation and are setting a new standard for the corpoarte culture, one which rids the company of the ghosts in its past.

The stock has been stagnant for a number of years now, and in a recession spending on enterprise technology will only increase as employers search for ways to cut costs ranging from energy to sales to human resources.

THIS COMPANY IS NOT GOING TO DO GOOD IN THE STOCK MARKET

Has #1 selling security software suite after entering this field just 2 years ago - strong management team and loyal base

VALUE LINES - TIMELY STOCKS IN TIMELY INDUSTRIES

Beta>2,Altman>2.9 thus probably recommended a lot.

Boom and bust cycle for this company still alive and well. They can't get off their addiction to breaking open old maintenance contracts and stuffing new license revenue out the door - a practice that ultimately trades larger future revenues for smaller present revenues.

Avoid this one for a quarter or two.

CA's spectrum and ehealth products continue to shine as the company tries to put it's troubled past to rest

100

The contrarians latched onto this one after a demeaning article in a national magazine.

However, the criticisms in the article were valid. CA is a dumb giant still bleeding from corruption. Turnaround, even with the best management, has CA starting from scratch where others are innovating.

CA will continue to exist, but the heyday of its status as a well for alpha is long gone for now.

Clueless management, silly savings attempts to cut costs hint at much larger issues. Worrisome is that they don't seem to have a clue where the cash flow went in their last quarter. P/E is whopping high. Future P/E still way above 20 at the current valuation. No major new product announcements for a year. Where are the earnings going to come from to sustain even a PE of 20?

CA, Inc. began operations in 1976, and is now one of the world’s largest providers of information technology enabled management software. The company is an independent software vendor and develops and licenses software products that enable computer hardware platforms and operating systems to be sold by vendors. The company with around $4 billion in annual revenue mainly divides it product development into five business units, which are Enterprise Systems Management, Security Management, Storage Management, Business Service Optimization, and the CA Products Group. CA has been involved in a huge acquisition spree with around 50 acquisitions since inception including the recently acquired Cybermation and MDY Group International.

The company is facing stagnant performance due to declining mainframe market. The revenue rose by mere 4% during the six months ending September. However the income is seeing a huge decline by over 35% mainly due to increase expenses and rise in product development cost. The repurchase of $1 billion of stocks have come as the only respite for the stockholders.

CA’s lackluster performances have lead to a management turnaround, and a newfound focus on restructuring activity. The product line of over thousand offerings that company has garnered with help of the acquisitions, is now acting as a main hurdle. Further, the number of scams and higher attrition rate are making things worse in restructuring. In 2007 the company is not expected to see a major turnaround, as the drop of around 20% in bookings due to declining customer license, will take its toll. Moreover, considering the declining cash from operations that could slow down any new acquisitions, as well the postponement of company’s share repurchase plan, it is unlikely that any inorganic growth will be achieved in the year, and thus makes it very difficult for CA to beat the benchmark returns in 2007.

I have yet to figure out what this company really does - and I work in banking IT

Latest ethics issues seem to be indicative of company values. CSC rejected a bid to be purchased by CA and shot through the roof when they successfully blocked that bid. I don't know why they were so panicked by a merger with CA, but it taught me something about this company.