CACI International, Inc. (NYSE:CACI)

Good fundamentals, very cheap on EBIT and Book basis, good overall profitability that is likely to be maintained and sign of economic moat

# 24 - CACI - "The Forbes Fast Tech 25: Our Annual List Of Growth Kings" 5/02/2012
forbes.com/sites/ericsavitz/2012/05/02/the-forbes-fast-tech-25-our-annual-list-of-growth-kings/2/
(complete list is at the bottom)

Excerpts from the S&P stock report on CACI (February 11, 2013) :

"We expect revenues to be flat in FY 13 (Jun.), partially on a very weak December quarter, and we look for a 1.0% drop in FY 14. Agencies that CACI serves have factored sequestration (pushed back to a March 1 deadline from a January 1, 2013, deadline) into their budgets. The potential cutbacks and associated uncertainty are causing customers to delay spending decisions. We think the Department of Defense will be particularly affected. Even if a compromise is reached, notable budget cuts are likely. The draw-down of troops in Afghanistan is an additional near-term headwind."

"We see narrower operating margins in FY 13 after a strong FY 12, which was aided by two one-time gains that we include in our calculation. Reduced levels of ODCs (other direct costs - material purchases and subcontracted activities) should help, but we have concerns about costs from bid and proposal activity, increasing competition, and pricing pressures."

"In FY 13, CACI expects to purchase about four million shares, or about 15% of the total outstanding. Assuming 24 million shares for FY 13, we calculate EPS of $6.59. Our FY 14 estimate is $6.34."

- "Investment Rationale/Risk" :

"Our hold opinion is based on our concerns about the pace of spending by the federal government. Also of concern is the threat of sequestration in March, which would trigger automatic across-the-board spending cuts of $500 billion over the coming 10 years for the Department of Defense (DoD), unless the law is modified or rescinded by Congress. Longer term, we have a positive view of CACI's prospects, given its exposure to programs that the DoD views as high priority, such as C4ISR, cyber-security and intelligence. Also, we view positively CACI's drive to diversify its revenue streams."

"Risks to our recommendation and target price include acquisition integration risk, pricing pressures, changes in government procurement policies, and a slowdown in defense spending. Our concerns regarding corporate governance include a "poison pill" that was not approved by shareholders."

"Our 12-month target price of $58 reflects a peer-average multiple of 9.1X our EPS estimate of $6.40 for calendar 2013. The peer group includes a number of IT outsourcing companies that have regular business dealings with the federal government, and the DoD in particular."

*** - S&P rates CACI at 3 stars = Hold
- 12-month target price - $58
- S&P Fair Value Rank: 5+ (5 = most undervalued, 1 = most overvalued)
- S&P Fair Value Calculation: $95.60 - "Analysis of the stock's current worth, based on S&P's proprietary quantitative model suggests that CACI is Undervalued by $42.71 or 80.8%."

**** - Morningstar rates CACI at 4 stars
- fair value estimate of $62
financials.morningstar.com/competitors/industry-peer.action?t=CACI

Earnings:
Last Report: Q2 Earnings on 01/30/13
Reported Earnings: $1.69 per share
Next Expected Report Date: 05/03/13
eresearch.fidelity.com/eresearch/evaluate/fundamentals/earnings.jhtml?symbols=CACI

The entire "List Of Growth Kings" (in a descending pace of growth)

1 LNKD caps.fool.com/Ticker/LNKD.aspx Social Networking
2 AAPL caps.fool.com/Ticker/AAPL.aspx Computer Hardware/Software
3 QLIK caps.fool.com/Ticker/QLIK.aspx Business Analytics Software
4 ATHN caps.fool.com/Ticker/ATHN.aspx Cloud-based Healthcare Services
5 EQIX caps.fool.com/Ticker/EQIX.aspx Data Center Services
6 EBIX caps.fool.com/Ticker/EBIX.aspx Software/E-commerce Services
7 ARUN caps.fool.com/Ticker/ARUN.aspx Wireless Equipment
8 RVBD caps.fool.com/Ticker/RVBD.aspx Networking Equipment
9 CTSH caps.fool.com/Ticker/CTSH.aspx Computer Programming Services
10 SFLY caps.fool.com/Ticker/SFLY.aspx Online Digital Photo Services
11 FIRE caps.fool.com/Ticker/FIRE.aspx Security Systems Services
12 SWI caps.fool.com/Ticker/SWI.aspx IT Management Software
13 SREV caps.fool.com/Ticker/SREV.aspx Revenue Management Software
14 SNCR caps.fool.com/Ticker/SNCR.aspx Transaction Management Systems
15 ACOM caps.fool.com/Ticker/ACOM.aspx Online Genealogy Services
16 FTNT caps.fool.com/Ticker/FTNT.aspx Security Systems Services
17 PEGA caps.fool.com/Ticker/PEGA.aspx Business Management Software
18 RAX caps.fool.com/Ticker/RAX.aspx Internet Software/Services
19 QSII caps.fool.com/Ticker/QSII.aspx Healthcare Software
20 EGOV caps.fool.com/Ticker/EGOV.aspx Information Retrieval Services
21 RHT caps.fool.com/Ticker/RHT.aspx Open Source Software
22 GPN caps.fool.com/Ticker/GPN.aspx Electronic Payment Services
23 CVLT caps.fool.com/Ticker/CVLT.aspx Systems Software
24 CACI caps.fool.com/Ticker/CACI.aspx Government Technology Services
25 VRSN caps.fool.com/Ticker/VRSN.aspx Internet Software/Services

Got the idea from http://www.fastgraphs.com/_blog . It does look like a good bargain here.

CACI's 2013 estimated earnings indicates this stock should be around the $90 range within the next 12 months. That's very attractive. And, with only one thumbs down vote from CAPS all-stars. I feel confident that CACI is definitely a thumbs up stock for at least the next 12 months.

Good growth and earnings.

Volume peak reached, stochastik is still high

For fiscal 2009, management expects revenues to come around $2,550-$2,650 million. Operating margin is anticipated around 6.6%-6.8%. EPS is estimated around $2.90-$3.10. We have adjusted our FY 2009 revenue/EPS estimates accordingly and maintain our Buy rating with a target price of $55. Our target price implies a P/E multiple of 18x when applied to our 2009 EPS estimate, in line with the median multiple for the industry.

Ready to grow

very solid financials

Morningstar 5-star pick...

Nice tech stock

This company has been doing really well in Government contracting sector.

CACI is a leader in IT services for the Government and many other large companies. This is a great investment for the long run.

CACI is aquiring a lot of smaller, well managed companies and has also been receiving more and more GVT CTR large fund awards. It recently posted a FY08 QTR 1 that was well above what was expected and I think they will continue to do so.

Government contractor during an uncertain election year with active outside interference (interrogator lawsuit).

CACI is ripe for a buyout, and given the recent retirement announcement of its CEO, I believe the push to remain independent will go away

57

Pros: Great valuation at current levels. Defense spending will remain little changed over the next 3 years. expected growth of around 10-12% a year. My target for this stock is $60. Significantly undervalued at current levels.

Cons: CACI has a poison pill in place that guards against hostile takeovers. Uncertainty after 3 years in terms of defense spending which comprises a great deal of CACI's bussiness

Set to benefit from the coming increase in wars. Remember, the defense industry doesn't serve only the US. . . but all of its allies, as well.

good valuation, good macro fundamentals