Why Computer Task Group Shares Popped

Why Computer Task Group Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Computer Task Group rose by as much as 17% during intraday trading Tuesday after Riley & Co. analyst Kevin Liu upgraded the stock from "Neutral" to "Buy."

So what: Liu also assigned a price target of $19.75 per share to the IT solutions specialist, or an 8% premium to the current price as of this writing. At the same time, Liu admitted investors are still rattled by last quarter's weak forward guidance caused by difficulties in the company's general solutions and staffing business. However, he says, they seem to be overlooking the potential for CTG's medical model and fraud, waste, and abuse solutions, which could provide a nice boost to earnings going forward.

Now what: As fellow Fool Sean Williams pointed out earlier today, much of last quarter's weakness was caused by delays in rolling out Computer Task Group's electronic medical records software. Once those kinks are worked out, however, CTG will be nicely positioned to benefit from the increased IT solutions requirements from the ongoing roll-out of Obamacare. As a result, and with the stock still trading well below its 52-week-high above $26 per share, I think patient long-term investors should likely do well buying shares even after today's pop.

More expert advice from The Motley Fool
Obamacare is rewriting the rules for the health care industry, and in the process of doing so, it's creating massive opportunities for investors to get ridiculously rich. How? By investing in a handful of specific health care stocks. In this free report, our analysts walk you through these opportunities and the companies that are positioned to exploit them. The informational edge contained in it is invaluable, but can only be exploited profitably while the rest of the market remains in the dark. To access this free report instantly, simply click here now.

The article Why Computer Task Group Shares Popped originally appeared on Fool.com.

Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published