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Telecommuting: Plus or Minus for Your Portfolio? – Cisco Systems, Inc. (CSCO), Intel Corporation (INTC)

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As someone who works from home and has had several jobs which allowed me to telecommute at least part of the time, I started to think about all the telecommuting talk in the news lately. How are companies with high rates of telecommuting faring in the market? Do companies need that Google-like campus environment to stay creative and current, or is that just one successful model?

Intel Corporation (INTC)

I looked at some of the top 10 companies for telecommuting from Fortune’s 100 Best Companies to Work For list to see what they looked like from an investor’s perspective. After all, a great company to work for may not be a great company to invest in. I chose four companies from various parts of the top 100 list: The Ultimate Software Group, Inc. (NASDAQ:ULTI), Cisco Systems, Inc. (NASDAQ:CSCO), Intel Corporation (NASDAQ:INTC), and Accenture Plc (NYSE:ACN). All four companies have high rates of regular telecommuting among their work force.

Ultimate Software Group

Founded in 1990, The Ultimate Software Group provides human capital management software to businesses. Their software suites are cloud-based, and the company has been listed in Fortune’s 100 Best Companies to Work For two years in a row, rising from 25 to number 9 in 2013. Ultimate Software reports that 50% of their employees telecommute. With a five-year stock chart that has a lovely overall rise from 2009 to the present, a market cap of $2.71 billion, and a price-earnings ratio of a whopping 194.8, investors are clearly expecting great things from Ultimate Software Group.

Can their earnings ever justify their share price? Maybe. They announced earlier this month that they plan on dramatically expanding their global human capital management offerings, as well as a new partnership with Celergo to offer payroll worldwide. At the very least, The Ultimate Software Group belongs on your watch list, because they might just be able to justify that high P/E ratio.

Cisco

Founded in 1984, Cisco designs, manufactures, and sells networking equipment. Cisco Systems, Inc. (NASDAQ:CSCO) rose this year to rank of 42 on Fortune’s 100 Best Companies to Work For list. Last year, they were ranked 90. Cisco reports that 90% of their employees telecommute. Cisco had a rough time last year with layoffs and a drop in the stock price, but over the last twelve months they’ve been digging out of that hole with a massive re-branding effort. With a market cap of $110.05 billion and a price-earnings ratio of 11.91, Cisco Systems, Inc. (NASDAQ:CSCO) looks like a company re-establishing itself.

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