Cray Inc. (cray)

[chmcnfunds]

Cray Surging in Traditional Pattern (CRAY, IBM, HPQ)
Cray up 78.52% for 2012 with Big Contract Booked

By Jonathan Yates
Sep 5, 2012 6:15:27 AM PDT |

Cray Computers (NASDAQ: CRAY) historically performs best towards the end of the calendar year. Selling its advanced computers to universities, governments and other institutional investors, much of the revenue is booked in the third and fourth quarters. This happens in the high tech sector for companies such as IBM (NYSE: IBM) and Hewlett Packard (NYSE: HPQ), too.

A Cray XE6m Supercomputer was just sold to the Consortium for Advanced Research on Transport of Hydrocarbon in the Environment (CARTHE). The Cray XE6M is being acquired to help CARTHE to develop and improve computational tools to better determine the patterns of hyrdocarbons upon release into the atmosphere. This will be done for both normal and adverse weather conditions, such as hurricanes.

This has been a strong year for Cray, already. Year to date, Cray is up 78.52%. The stock price has more than doubled in the last year of market activity.

Both the balance sheet and income statement point towards this continuing. The capital structure of Cray is very sound: there is no debt and plenty of cash. The stock price-to-cash ratio is 2.02.

Sales and earnings are soaring. On a quarterly basis, sales growth is higher for Cray Inc by 23.94%. Due to several huge deals, earnings-per-share growth for Cray is up this quarter by 4734.29%.

The price-to-earnings ratio for Cray Inc is just 2.54. Its price-to-earnings growth ratio is only 0.13. According to legendary investor Peter Lynch, the PEG is one of the most important indicators. A PEG of 1 is considered to be adequate: the lower the better. IBM has a PEG of 1.33.

Now trading for around $11.50 a share, the mean analyst target price for Cray Inc over the next year of market action is $14.50. With a profit margin of over 50% and a return-on-equity of 73%, Cray Inc should continue rising to that level, particularly with its strongest quarters ahead.
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http://www.smallcapnetwork.com/Cray-Surging-in-Traditional-Pattern-CRAY-IBM-HPQ/s/via/3420/article/view/p/mid/1/id/1285/

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