Former IBM (NYSE:IBM) executive John Swainson sure had his work cut out for him when he took over the CEO spot at software giant CA (NYSE:CA). Last night, the company took another step in the right direction legally when it announced that it had met the terms of a 2004 deferred prosecution agreement (DPA) and that the DPA had expired. On Wednesday, investors will get a glimpse of CA's financial progress when the company announces its fourth-quarter and fiscal-year results.
After the earnings are released, we'll have plenty of data to dig into. But before that happens, let's step back and take a look at what investors think about CA as a long-term investment. To gain this insight, I've tapped into Motley Fool CAPS, where more than 29,000 rated investors have joined together to offer their thoughts on more than 4,500 companies, CA among them. Here's what Fools have to say about this company.
Up or down?
There have been 86 investors weighing in on CA so far, and the outlook is bleak.
Out of a possible five stars, CA has been awarded one -- the lowest possible. Overall, only a third of all ratings have been in favor of CA. When it comes to the CAPS All-Stars -- those investors in the top 20% of all CAPS players -- CA was given the nod a lousy 19% of the time.
Among comparable stocks, CA finds itself right smack at the bottom of the group in CAPS.
|
Stock |
CAPS Rating |
|---|---|
|
IBM |
*** |
|
Oracle (NASDAQ:ORCL) |
*** |
|
BMC Software (NYSE:BMC) |
** |
|
Microsoft (NASDAQ:MSFT) |
** |
|
Symantec (NASDAQ:SYMC) |
** |
|
CA |
* |
|
McAfee (NYSE:MFE) |
* |
Wall Street vs. Main Street
When we turn to the Wall Street types, we find a heck of a lot of waffling -- of the 15 analysts following CA, 13 have hold ratings on the stock, one has called outperform, and one has called underperform. Not much help there!
Despite the continued uncertainty, the stock has done well over the past year. It gained 24% in the past 12 months, compared to the 20% that the S&P put up. It's possible that the higher stock price has contributed to the lukewarm sentiment from Wall Street and downright pessimism from CAPS players.
Bull pitch
In support of the stock, CAPS player Mishra0 throws the Hail Mary: "All the bad news is priced in. What else could happen?" and, later, "[B]ottoms are made when it can't possibly get any worse."
And speaking of earnings, WSMOOT19 recently picked the stock specifically because of the expectation that "the stock will go to 30 next Thursday due to a strong earnings report."
Bear pitch
For the bears, DeliciousIrony asserts: "I have yet to figure out what this company really does -- and I work in banking IT."
JUMPKIS, a CAPS All-Star, adds:
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.
Who said that?
To see more from the wise Fools who penned these words, and explore the wealth of additional financial data we've put together on the company, just click here.
Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. Microsoft and Symantec are Motley Fool Inside Value choices. The Fool's disclosure policy had a page on MySpace, but became way too popular and ended up spending all of its time updating its photos.
