Investors Cut Their Short Positions For Cognizant Technology Solutions Corporation (CTSH)

In the period that ended December 31, 2018, short interest in Cognizant Technology Solutions Corporation (NASDAQ:CTSH) stock is on the decline. The 1.19% drop could be an indication that investors and traders expect a strength in the stock price, often as a result of a strength in the business’ fundamentals. The average analyst recommendations at 2.2 suggests buying these shares. Between December 14 and December 31, the total number of shorted shares amounted to 6 million shares. That was 72,402 less shares than the total of 6.07 million shares in the space of prior two weeks, which means more traders or funds betting that the stock will go up. Average daily volume for CTSH at the December 31st settlement jumped to 4,238,327, as compared to 3,768,101 at the December 14th report. That brought days to cover to 1.414934, a 12.16% decrease from the 1.61072 days to cover recorded at the prior short interest data release.

Investors will get their next glimpse of CTSH’s Q4 earnings on February 06. Analysts are forecasting revenue to climb 7.5 percent to $4.12B in the next fiscal quarter, while earnings are seen soaring by nearly 2.91 percent to $1.06 per share. History has shown that shares in Cognizant Technology Solutions Corporation have gone up on 18 different earnings reaction days and are predicted to add 0.04 percent when the company reports upcoming earnings. In last reported earnings results, it earned $1.19 per share, better than the $1.13, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $4.08B, in line with the $4.08B analysts expected. Earnings are estimated to increase by 40 percent this year, 12.28 percent next year and continue to increase by 12.66 percent annually for the next 5 years.

Cognizant Technology Solutions Corporation (CTSH) will probably climb 27.22 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $100price as 12-month high target. This represents a whopping 54.3 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $80, which represents a return potential of 23.44 percent when compared to the closing price of the stock of $64.81 on Thursday, January 10. The lowest price target for the stock is $63 — slightly more than -2.79 percent from CTSH’s current share price.

The stock is currently hovering around the first support level of $63.92. Below this, the next support is placed in the zone of $63.04. Till the time, the CTSH stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 48.63 on daily chart, which may remain a cause for concern. If the price breaks below $63.04 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $65.27 mark may result into a pull-back move towards $65.74 level.

On 10th of January, Cognizant Technology Solutions Corporation (NASDAQ:CTSH) shares ended higher after a volatile session. The shares accumulated 0.55 points or 0.86 percent at $64.81 with a light trade volume of 3.311 million shares. After opening the session at $63.64, the shares went as high as $64.85 and as low as $63.5, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $37.5 billion and now has 579 million shares outstanding. Cognizant Technology Solutions Corporation (CTSH) stock has lost -3.4 percent of market value in 21 trading days.

CTSH stock has a trailing 3-year beta of 0.97, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $3.49 a share in the trailing twelve months. The stock’s value has surged 2.1 percent year to date (YTD) against a decline of -11.78 percent in 12 month’s time. The company’s shares still trade -23.84 percent away from its 1-year high of $85.10 and 8.98 percent up from 52-week low of $59.47. The average consensus rating on the company is 2.2, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

Shares of Cognizant Technology Solutions Corporation (CTSH) are trading at a P/E ratio of 23.63 times earnings reported for the past 12 months. The industry CTSH operates in has an average P/E of 22.47. Its P/E ratio went as low as 21.5X and as high as 25.05 over the 5-year span. Further, it is sporting a 2.37 on the Price-to-Sales ratio. Compare this with the industry average P/S of 3.26. 40 percent is the gross profit margin for Cognizant Technology Solutions Corporation and operating margin sits at 17.5 percent. Along with this, the net profit margin is 9.1 percent.

Let’s take a look at some insider activity at Cognizant Technology Solutions Corporation (NASDAQ:CTSH) and see the pattern. The earliest insider trade took place on 01/03/2019. Frank Malcolm parted with a total of 7.25 thousand shares of company at average share price of $61.88. The total for the sales was set at $448.69 thousand. After this transaction, the Exec. VP, Strategy & Marketing account balance stood at 26.29 thousand shares. The stock grew 4.73 percent since that insider sale. On 01/03/2019, Lennox James Patrick, EVP – Chief People Officer, sold 3.01 thousand shares at a price per share of $63.28. This removed 190.66 thousand shares from the insider’s fortune and the stock saw a 2.42 percent rally in value since the news became public. This transaction left 3.41 thousand shares in the EVP – Chief People Officer account.

On 12/14/2018, General Counsel Friedrich Matthew W. performed a sale transaction worth $30.67 thousand. This sale at $68.3 each has eliminated 0.45 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -5.11 percent decrease since the transaction was reported. The insider now is left with 0 thousand shares remaining in the account. Lennox James Patrick, who performs the EVP – Chief People Officer job, sold 0.75 thousand shares for $51.1 thousand. The disposal occurred on 12/14/2018 was priced at $68.32 per share. The share price plunged -5.14 percent since the reporting date. Lennox James Patrick now left with a stake of 6.29 thousand CTSH stock worth $407.46 thousand after the insider selling.