One stock that looks quite good right now is Cognizant Technology Solutions (CTSH), one of the leading companies in IT outsourcing. In plainer terms, Cognizant runs all those call centers, explains Eddy Elfeinbein, editor of Growth Stock Advisor.
Technically, Cognizant is based in New Jersey, but its heart is in India, where roughly 200,000 of its 280,000 employees are based. Outsourcing has become a profitable business, enabling American tech companies to cut costs.
Despite what its critics think, Cognizant is also a big employer is this country. The company employs about 50,000 people in the U.S. at 32 locations around the country.
The company began life as the in-house tech firm of Dun & Bradstreet. It was later renamed Cognizant Technology Solutions and it started trading publicly in 1998.
One of the reasons why I highlight Cognizant is that it’s not outrageously expensive. Right now, the shares are going for just under 17 times next year’s earnings.
I was also impressed by Cognizant’s last earnings report. For Q2, Cognizant earned 82 cents per share. That was well above Wall Street’s consensus of 69 cents per share. Quarterly revenues hit $4 billion which also beat estimates of $3.84 billion.
I was particularly impressed by Cognizant’s guidance for this year. The company now sees 2020 earnings ranging between $3.48 and $3.58 per share.
Wall Street had been expecting $3.39 per share. Wall Street is catching on. After the earnings report, the analyst from JP Morgan upgraded the stock and raised his price target to $69 per share.
Cognizant is one of the few Nasdaq stocks with a share price that’s not in orbit. This is a company is a great position to profit as the economy gets back on its feet.