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How Has CDK Global Performed in a Competitive Market?

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Nov. 4 2015, Published 8:43 a.m. ET

CDK Global and its peers

In this article, we’ll compare CDK Global (CDK) with its peers:

  • The PE (price-to-earnings) ratios of CDK and DST Systems (DST) are 46.2x and 8.5x, respectively.
  • The PBV (price-to-book value) ratios of CDK, Autodesk (ADSK), Nuance Communications (NUAN), DST Systems, and Solera Holdings (SLH) are 10.6x, 6.9x, 2.4x, 4.1x, and 16.1x, respectively.

  • The PS (price-to-sales) ratios of CDK, Autodesk, Nuance, DST Systems, and Solera are 3.9x, 5.2x, 2.8x, 1.6x, and 3.2x, respectively.

Thus, CDK Global has outperformed its peers based on PBV and PS.

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ETFs that invest in CDK Global

The PowerShares Dynamic Software ETF (PSJ) invests 2.6% of its holdings in CDK. The ETF uses a quantitative model to choose US software companies across the market capitalization spectrum.

The iShares S&P North American Technology-Software ETF (IGV) invests 1.6% of its holdings in CDK. The ETF tracks a market-cap–weighted index of US and Canadian software companies.

The AdvisorShares TrimTabs Float Shrink ETF (TTFS) invests 0.99% of its holdings in CDK. The ETF aims to outperform broad US equities. The actively managed, equal-weighted fund selects stocks based on trends in outstanding shares, company leverage, and free cash flow.

CDK Global and its ETFs compared

Now let’s compare CDK with the ETFs that invest in it:

  • The year-to-date price movements of CDK, PSJ, IGV, and TTFS are 25.6%, 11.0%, 13.0%, and 2.4%, respectively.
  • The PE ratios of CDK, PSJ, IGV, and TTFS are 46.2x, 27.2x, 52.4x, and 29.4x, respectively.
  • The PBV ratios of CDK, PSJ, IGV, and TTFS are 10.6x, 4.3x, 4.9x, and 2.6x, respectively.

Thus, CDK Global has outperformed its ETFs based on price movement, PE, and PBV.

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