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Why Unisys is a Compelling Pick for Investors at Present
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Unisys Corporation (UIS - Free Report) is a globally renowned technology services and solutions company. The company builds more secure organizations by creating visibility into clients' business operations.
The company has a VGM (Value, Growth, Momentum) Score of ‘A’. Per the value metric, Unisys is currently undervalued when compared with the industry. It holds a Value Score of ‘A’ which indicates that it is a good pick for value investors. The company currently has a Growth Score of ‘A’. The company’s estimates for the current year increased from $1.86 to $1.87 per share. Recent price changes and earnings estimate revisions indicate that this is a good stock for momentum investors as it has a Momentum Score of ‘B’.
The company is currently trading at a PE of 7.43x compared with the industry’s PE of 18.20x. This indicates that the company’s shares are undervalued compared with the industry and is expected to witness growth in the near future.
Unisys intends to boost its top line and bottom line in the near term on the back of disciplined financial focus, appropriate implementation of ongoing vertical go-to-market strategy and unique product offerings. Notably, during fourth-quarter 2016, the company inked several contracts. All these deals would likely fortify its business in the quarters ahead.
Unisys has been restructuring its business to improve profitability. The restructuring strategy includes selling non-core businesses and revamping its sales strategy along with investing in a few higher-growth areas such as outsourcing. Unisys saved approximately $205 million in 2016 through restructuring initiatives, exceeding its original target of $200 million. We expect the company to continue with its cost-control initiatives and put greater effort toward sales growth, as it strives to overcome its operational weaknesses. Unisys is focusing more on building specialized industry skills and resources required to win industry-specific project opportunities. The company is investing heavily in developing a team dedicated to pursuing growth opportunities for application-managed services, both for existing and new clients. These application-based managed services capability will enable Unisys to more effectively pursue long-term application outsourcing opportunities, as well as associated application modernization and implementation project work.
The company underperformed the Zacks categorized Computers - IT Services industry, with an average loss of 2% in the last 30 days compared with 0.6% decline of the latter. It remains focused on its strategic investments in high-potential products and services, to drive growth and boost results, going forward.
Bottom Line
Unisys currently carries a Zacks Rank #2 (Buy). A positive Zacks Rank combined with the above mentioned growth drivers currently make it a compelling pick for investors.
Amdocs has a strong long-term earnings growth expectation of 7.47%.
Computer Task Group boasts a solid earnings history, beating estimates thrice in the trailing four quarters with an average positive surprise of 35%. It also has a healthy long-term earnings growth expectation of 10%.
CDW Corporation has a long-term earnings growth expectation of 8%. The stock has a healthy earnings history, beating estimates in three of the trailing four quarters with an average positive surprise of 5.9%.
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Why Unisys is a Compelling Pick for Investors at Present
Unisys Corporation (UIS - Free Report) is a globally renowned technology services and solutions company. The company builds more secure organizations by creating visibility into clients' business operations.
The company has a VGM (Value, Growth, Momentum) Score of ‘A’. Per the value metric, Unisys is currently undervalued when compared with the industry. It holds a Value Score of ‘A’ which indicates that it is a good pick for value investors. The company currently has a Growth Score of ‘A’. The company’s estimates for the current year increased from $1.86 to $1.87 per share. Recent price changes and earnings estimate revisions indicate that this is a good stock for momentum investors as it has a Momentum Score of ‘B’.
The company is currently trading at a PE of 7.43x compared with the industry’s PE of 18.20x. This indicates that the company’s shares are undervalued compared with the industry and is expected to witness growth in the near future.
Unisys intends to boost its top line and bottom line in the near term on the back of disciplined financial focus, appropriate implementation of ongoing vertical go-to-market strategy and unique product offerings. Notably, during fourth-quarter 2016, the company inked several contracts. All these deals would likely fortify its business in the quarters ahead.
Unisys has been restructuring its business to improve profitability. The restructuring strategy includes selling non-core businesses and revamping its sales strategy along with investing in a few higher-growth areas such as outsourcing. Unisys saved approximately $205 million in 2016 through restructuring initiatives, exceeding its original target of $200 million. We expect the company to continue with its cost-control initiatives and put greater effort toward sales growth, as it strives to overcome its operational weaknesses. Unisys is focusing more on building specialized industry skills and resources required to win industry-specific project opportunities. The company is investing heavily in developing a team dedicated to pursuing growth opportunities for application-managed services, both for existing and new clients. These application-based managed services capability will enable Unisys to more effectively pursue long-term application outsourcing opportunities, as well as associated application modernization and implementation project work.
The company underperformed the Zacks categorized Computers - IT Services industry, with an average loss of 2% in the last 30 days compared with 0.6% decline of the latter. It remains focused on its strategic investments in high-potential products and services, to drive growth and boost results, going forward.
Bottom Line
Unisys currently carries a Zacks Rank #2 (Buy). A positive Zacks Rank combined with the above mentioned growth drivers currently make it a compelling pick for investors.
Other Stocks to Consider
Some other favorably ranked stocks in the industry include Amdocs Limited (DOX - Free Report) , Computer Task Group Incorporated , and CDW Corporation (CDW - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amdocs has a strong long-term earnings growth expectation of 7.47%.
Computer Task Group boasts a solid earnings history, beating estimates thrice in the trailing four quarters with an average positive surprise of 35%. It also has a healthy long-term earnings growth expectation of 10%.
CDW Corporation has a long-term earnings growth expectation of 8%. The stock has a healthy earnings history, beating estimates in three of the trailing four quarters with an average positive surprise of 5.9%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>