CEOs Are Buying These Stocks (Part I): Bally Technologies Inc. (BYI), Electronic Arts Inc. (EA)

One of its peers, WebMD Health Corp. (NASDAQ:WBMD), has a much higher valuation. At the current price of $16.60 per share, WebMD is worth nearly $830 million on the market. It is valued at 16.53x EV/EBITDA and 1.61x book value. However, WebMD generated much less profitability than Computer Programs. While the operating margin of WebMD was 4.93%, Computer Programs had a 23% operating margin. In addition, WebMD used much more leverage than Computer Programs. As of September 2012, WebMD had $510 million in total stockholders’ equity, $970 million in cash, and $800 million in long-term debt. Its debt/equity ratio was 1.6x, while Computer Programs had no debt at all.

Foolish Bottom Line

With the decent dividend yield and consistently high returns on invested capital, Computer Programs is a good stock to own for the long term. First Commonwealth seems to be a good play on the improving residential real estate market. However, both Computer Programs and First Commonwealth had a bit rich valuations. I would rather wait for some price corrections before coming in.

The article CEOs Are Buying These Stocks (Part I) originally appeared on Fool.com and is written by Anh HOANG.

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