For a rising portfolio

Learn everything you need to know in 'How to Find the Best Growth Stocks' for FREE from The Successful Investor.

Canadian Growth Stocks: CGI Group, CAE Inc., Fortis Inc. Stock and more.

 I consent to receiving information from The Successful Investor via email. I understand I can unsubscribe from these updates at any time.

Topic: Growth Stocks

TERADATA CORP. $41 – New York symbol TDC

TERADATA CORP. $41 (New York symbol TDC; Aggressive Growth Portfolio, Manufacturing & Industry sector: Shares outstanding: 167.5 million; Market cap: $6.9 billion; Price-to-sales ratio: 3.7; No dividends paid; TSINetwork Rating: Average; www.teradata.com) makes computers and software that capture and store large amounts of a business’s data. Teradata then analyzes this information and identifies buying habits and trends.

Teradata is taking advantage of the weak economy to hire new salespeople. That’s helping it enter new markets and offer more technology and services to its existing clients. These efforts should add $70 million to Teradata’s 2010 sales. As well, it continues to spend around 7% of its revenue on research. Resulting new products should also fuel its growth.

In the three months ended September 30, 2010, earnings rose 19.0%, to $75 million from $63 million a year earlier. Earnings per share rose 22.2%, to $0.44 from $0.36, on fewer shares outstanding. Sales rose 15.1%, to $489 million from $425 million. The company has no debt, and holds cash of $741 million, or $4.42 a share.

Teradata has gained 55% since NCR Corp. spun off the stock as a separate company on October 1, 2007. It trades at 23.4 times Teradata’s likely 2010 earnings of $1.75 a share. That’s a reasonable p/e ratio in light of its strong growth prospects and high research spending.

Teradata is a buy.

Comments

Tell Us What YOU Think

You must be logged in to post a comment.

Please be respectful with your comments and help us keep this an area that everyone can enjoy. If you believe a comment is abusive or otherwise violates our Terms of Use, please click here to report it to the administrator.