Repeating The Case For CA Inc.

CA Inc. is the type of stock I have done very well with in the past. It is a steady business with a cheap valuation where the company is beginning to return capital to shareholders.

CA Inc. is a software and services provider. Most of CA's business is through long term contracts of approximately 3.5 years. This makes their business steadier than most other technology companies. Business held up remarkably well during the Great Recession. The stock trades at less than 8 times forward free cash flow to enterprise value. A market multiple would lead to 50% upside in the stock.

Investors are fed up with CA as it has gone nowhere for over a decade. CA Inc. had been using free cash to pay down debt but is now sitting on a large net cash position. They have begun returning cash to shareholders via a more aggressive repurchase plan. I believe this will be the catalyst to finally spur the shares higher.

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