Hey Joe,

I have been watching CTSH also and agree that Co's like these, with high sales growth rates are difficult to evaluate with the Better Investing methods. Even though sales have have been steadily growing at 40+%, and management has predicted sales growth of 38% for 2008, I agree with your judgment of 5 year sales growth of 20%. (If the stock is a buy with sales at this level, and the actual sales are greater, we should be in for a nice return.)

I noticed a 25% decline in the PE of the stock in November of 2007. What caused that drop? I also noticed a similar drop in 2001, during the last US recession. That drop was short lived. In my SSG, I used a High and Low PE that was similar to the levels the stock has traded at since 11-07, as well as in 2001. These are close to the PE levels from Take Stock with the removal of additional outliers:(lowest High PE minus 1998; lowest Low PE minus 1998 and 1999)

I also did the preferred procedure but used a PreTax margin of 17.4% rather than the 20.2% average. This is because of the Stock Options and changes in tax rates for the company; both were discussed in the most recent quarterly report found on the Co. web page.

With these conservative changes, I find the stock a buy with both the High and Average future PE. It is also a buy using the future Cash Flow price. I have atteched my SSG and worksheet for the stock. Please let me know what you think.

How does this Company compare to INFY?

Pat Landers