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Why Jim Simons Owns CA Technologies
Posted by: matsandalex (IP Logged)
Date: November 5, 2012 10:38AM
CA Technologies (CA) has been battered in recent weeks as most big cap tech stocks have reported poor third quarter earnings. The stock is down 16% over the past eight weeks.
Is now a good time to load up on shares?
Jim Simons of Renaissance Technologies, one of the most successful hedge funds over the last decade, has a $67 million investment in CA shares.
The stock recently traded at $22.93 with a trailing price to earnings of 11.6 and a forward P/E of 8.51. CA sports a 4.4% dividend yield.
The stock has a market cap of $10.7 billion and total debt/equity ratio of 0.24. It should be noted that CA is not a stagnant tech company, with an estimated growth rate of 9.33% for the next five years.
The company has huge gross margins of 87% over the last five years and margins have never been below 85% even during the 2009 recession.
The company expects $1.4 billion of free cash flow which should protect the dividend and enable a share buyback.
Investors searching for a safe yield in a volatile equity environment may find CA Technologies appealing as a long-term investment.
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