Topic: Growth Stocks

TERADATA CORP. $55 – New York symbol TDC

TERADATA CORP. $55 (New York symbol TDC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 163.4 million; Market cap: $9.0 billion; Price-to-sales ratio: 3.4; No dividends paid; TSINetwork Rating: Average; www.teradata.com) makes computers and software that capture and store large amounts of a business’s data, including its sales and inventory. It then analyzes this information and identifies buying habits and trends, which helps its clients make better decisions. Teradata was a wholly owned subsidiary of NCR Corp. until October 1, 2007.

The slow economy is prompting businesses to cut spending on computer systems. That’s why Teradata’s revenue fell 4.2% in the first quarter of 2013, to $587 million from $613 million a year earlier. Earnings declined 29.1%, to $73 million, or $0.43 a share, from $103 million, or $0.60. Teradata spent 8.5% of its revenue on research in the latest quarter.

The company gets roughly half of its revenue from outside the U.S., and unfavourable foreign currency rates will probably hold back its sales this year. The stock trades at 19.7 times the $2.79 a share that Teradata will probably earn in 2013.

Teradata is a hold.

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