CA, Inc (CA) reported its fiscal fourth quarterly results that beat analysts estimates coming in at $.31 EPS compared to analyst estimates of $.29.  The company earned a total of $1.55 in fiscal 2009 and exceeded analysts estimates each quarter.  The stock is getting a nice 6% bounce at this point as the Street was nervous that the software and mainframe business had slowed to a crawl.  The company did see revenue slide about 5% on a year over year basis, which is comparatively not that bad in light of most technology firms troubles right now. Clearly, keeping costs in check was a major reason for the earnings beat in the past quarter.

“Welcome back to “Squawk”, a lot of people are thinking this is a bear trap, this early look at the gainer, CA, we used to lovingly call it Computer Associates now it’s just CA. It’s up 4 1/2%. Beat by two cents on the fiscal fourth quarter. They put a long term forecast out here that’s wide. They could lose money, make wall street seems to be relieved.” Squawk On the Street 5/14/2009

At Ockham, we have liked this stock for quite a while as you can see from our historical stock valuation chart.  The reasons why are plainly obvious when you take into account the stock’s current fundamentals when compared to its 10-year history.  For example, when looking at price-to-sales CA has normally traded at 2.98x to 4.8x premium to revenue per share but the current level is less than 2x.  The price-to-cash flow is an even more undervalued metric: the current level is 9.5x, which is far less than the 10 year historical range of 17.7x to 27.9x.  When looking back ten years, a great many stocks look undervalued, but not many look as undervalued as CA.  For this reason we have placed our most bullish Greatly Undervalued valuation on CA, Inc.

Furthermore, CA has not really gotten much of a benefit out of the recent rally that many in the technology sector have in the last 10 weeks.  In fact, over the last 3-months CA is actually down about 4% coming into the day.  In comparison, the technology sector was up 19.4% in the last three months prior to Thursday’s trading.  So, even if you missed the more than 6% pop today, we think that over the next few months there is plenty of appreciation potential in this company.

“Breaking news, Applied Materials coming out with earnings. Let me get to the breaking news desk to get those numbers. Matt Nesto is on it.

Reaction is muted here. Earnings are coming in in line for their fiscal second quarter at Applied Materials down 10 cents per share…

Indeed you have seen these headlines crossing at the bottom of your screen. Intel’s CEO has taken the stage here at the company’s analyst meeting here in the Silicon Valley.  Paul made headlines when the company came out with first quarter earnings report indicating that Intel’s business had bottomed. He stopped by our broadcast position here on the way into I asked if he planned to reiterate those comments and he said absolutely…saying about the industry bottoming out and based on those comments we’re seeing Intel shares turn positive.” CNBC’s Closing Bell 5/12/2009

Two semiconductor stocks were getting a lot of attention after the close of trading today, as Applied Materials (AMAT) swung to a second quarter loss but revenue topped estimates.  The loss was not unexpected as revenue was down 53% from last year, but still topped estimates of $906.1 million, coming in at $1.02 billion.  The stock is basically unchanged in after hours trading as Chairman and CEO Mike Splinter said, “In a period of exceptionally weak demand, Applied preserved its strong balance sheet, returned a dividend to our stockholders and made substantial investments in our future.”

However, just about ten minutes after Applied Materials reported, Intel’s (INTC) CEO Paul Otellini went on stage at a meeting for investors and analysts and proclaimed that Intel has seen the worst.  When a CEO makes a pronouncement like that the market feeds on the excitement of the executive and now we are seeing Intel trade higher by about 4%.  Although we have both of these stocks valuation currently as Undervalued, the technology sector which had long been our top rated sector has fallen to third most attractive.  That is still good, but worth noting as technology has spend the last few months at the top and has enjoyed 24% rally in the last 13 weeks.

For more on all other stocks mentioned on CNBC’s Closing Bell click here.