CDS has made quite an impressive run since i first wrote an article on this in May when it was trading in the $3/share range. After trading this sucker for a 151% gain things have cooled off a bit and healthy consolidations have taken there course. Technically price action had a solid 9.69% rally on friday with slightly above average volume breaking out of its symmetrical triangle pattern signifying a continuation in upward movement. The current bullish trend is very strong as price is riding the 13ema trend indicator. Fridays session again solidified this trend as price bounced strongly off this support area.
Analysts are expecting eps of .67 for CDS for the year of 2008 which is a solid 42% increase of the current year of 2007, revenues are expected to inrease 82%. The management services industry is trading at an average of 27x earnings while CDS has a forward P/E of just 16x earnings. Given these estimates we could expect CDS to be trading and fairly valued within its industry around $18/share. I think the current technical situation along with solid fundamentals and growth provides us with an opportunity to capitalize on some solid percentage gains.
Buying CDS
