Information technology services provider, CACI International Inc. (CACI - Free Report) recently unveiled its plans to establish a Shared Services Center or SSC in Oklahoma City, OK, to centralize operations and boost its presence in the region. The strategic decision will also enable it to improve productivity and efficiency levels by collating resources from a single pool.
CACI International expects the new SSC to be functional by July this year. The company already has a significant presence in the city and further aims to capitalize on the low-cost advantage and high-quality talent of the region to improve its return on investments. The new facility will deploy standardization and automation of fully integrated business systems and processes to increase its efficacy. At the same time, the decision will have an economic impact by generating more employment opportunities and ancillary business for the region.
CACI International intends to drive operational excellence by intensively focusing on a holistic growth model and strengthening its existing customer relationships while building newer ones. The company anticipates benefiting significantly from its cost-reduction program. It is also focused on its strategy to grow in larger markets, drive operational excellence and leverage mergers and acquisitions to increase market share and create long-term value for its shareholders. With diligent execution of operational plans, CACI International has outperformed the industry in the last three months with an average return of 16.4% compared with a 6% gain for the latter.
In addition, CACI International has a large pipeline of new projects and continues to win more deals at regular intervals. These back-to-back contract wins are the key catalysts to the company’s success. Furthermore, having the government as a big client lends stability to the business and moderates fluctuations in revenues. Although the government’s approval process is usually lengthy, the project continues to earn money even years after it has been approved.
Moreover, these contracts improve the visibility of future revenue streams. We believe the company is comfortably positioned, given its favored relationship with the Department of Defense. Cyber attacks are also creating increased awareness, leading to a heightened demand for cyber solutions.
We remain encouraged by this Zacks Rank #2 (Buy) stock’s relatively healthy growth dynamics. Other stocks in the industry worth considering include Ebix, Inc. (EBIX - Free Report) , OBIC CO LTD (OBIIF - Free Report) and CGI Group Inc. (GIB - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ebix has a long-term earnings growth expectation of 10%. It has beaten earnings estimates in each of the trailing four quarters with an average positive earnings surprise of 8.2%.
OBIC CO has healthy long-term earnings growth expectation of 10%.
CGI Group has a long-term earnings growth expectation of 9%.
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