Darren Taylor uses a bottom-up fundamental approach to stock selection for Covestor’s Top 5 Screener model. He recently bought CACI International (NYSE: CACI) for the model. CACI is an international IT services corporation. We asked Darren to share his reasons for buying CACI. His response follows.
I developed my model through prolonged back testing of screening criteria over the past 14 years of data and have been using this system for about two years now. Because this is a mechanical investing style, buying and selling when the model says to, I don’t have a whole lot of prose explanation for my stock selections. What I can tell you, based on CACI’s financials (all as of 5/30, via Yahoo Finance):
- Sales have increased each of the last three years.
- EPS have been positive and have increased each of last three years.
- Free cash flow in the last full year is greater than free cash flow from the prior full year.
- P/S (trailing twelve months) < 1.3x
- PEG ratio < 1.45x
I believe the company is in good shape and selling at an attractive valuation. And the chart looks pretty good too.
All financial statement data from Yahoo Finance, https://finance.yahoo.com/q/ks?s=CACI
Stock chart from stockcharts.com, 5/30. http://stockcharts.com/h-sc/ui?s=CACI&p=D&b=5&g=0&id=p85589823451