Computer Sciences Corp (NYSE:CSC)

Market over reacted to earnings call today. CSC is producing profit and is still under restructuring.

370. Computer Sciences Corp (NYSE: CSC) has recently touched down at $25 where it bottomed in 2009 during the height of the financial crisis. The stock surged over 20% February 8th after announcing great earnings. I think that the downside here has been overplayed. Target: $35-$45. 20% day surges on news like that tend to follow through over time into higher prices in a sustainable fashion. I'd definately recommend taking a look at their call transcript if you own CSC. When I look at this company I see normalized earnings of around $3.50. That puts my low end target at a personal multiple of around 10x which I think is reasonable.

http://beta.fool.com/bradford86/2012/02/08/whats-it-worth-csco-ctxs-csc-cpwr-acom/1813/

Worked there. They are very good at what they do. Sometimes Management needs to get out of being too structured. They need to think out of the box.

Their contracts are 2 to 5yrs. And yes there environment is competitive, but they have been in it for 50 yrs. Mike Lawrie came from Value Act as a partner. Is there a buy-out or turn around going on.

long term cash generator

This stock has been oversold and has been as high as $90.00 before current downturn.

This company has had some contractions in the past couple of years, and has had some major projects delayed (affecting timing revenue recognition). But I believe that it has been oversold, and the company is worth more than what it's trading for right now.

Here's the buy rec:
http://www.fool.com/investing/general/2011/07/25/rising-star-buy-5-contrarian-picks.aspx?source=ihpsitota0000001&lidx=7

Dan says: http://www.fool.com/investing/general/2011/07/18/todays-5-biggest-contrarian-plays.aspx

CSC is down 30% over the past six months after reporting disappointing earnings and weak guidance. One of the world's largest IT services firms, CSC runs essential IT processes and functions for governments and businesses. The U.S. government is CSCs biggest customer, making up 37% of its revenue in fiscal 2011.

It may seem ludicrous to purchase a company so dependent on the government, when every day Democrats and Republicans talk of throwing America under the bus. Still, the company is a cash cow, generating $900 million in free cash flow for the trailing 12 months ended April 1. That puts the firm's valuation at just more than times FCF. You rarely find solid companies trading that low.

lots of cash
plenty free cash flow
low fwd PE
no apparent sign of pending disaster
looks undervalued

"Managed Services" are the wave of the future. Alas.

Been around for decades. Well managed. Current share price is exceptionally low.

P/E (Trailing 12 mo.) 9.16x
EPS (Trailing 12 mo.) 5.297

Cyber security contractor with $30 million USAF contract and closing in on US Navy contract as well. Defending against cyber attacks is a large part of future defense spending worldwide.

solid perfomer.Steady company always conservative

overtake

Forward PE is a bit low while the EPS is strong. However, the cash and revenue seem pretty flat.

undervalued

OUTPERFORM

The forward PE is 10.24. I am setting an $84 target which is more than 50% above the current price.

Because CSC has UNDERPERFORMED since the dot.com bubble burst which has been over 10 years ago. CSC management finally has gotten their act together and the company may do well. CSC keeps being rumored as a takeover but at this price seems unlikely.