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On June 4, The Wall Street Transcript interviewed J. Derrick Wood, a Senior Research Analyst at Pacific Growth Equities, LLC, covering enterprise software. Key excerpts, including his sector pick, follow:

TWST: Is there anything else we should touch on?

Mr. Wood: One of our favorite stocks is Chordiant Software (CHRD), which has identified a large market, but a niche for what they are doing. They are a software company for call centers, and they focus on the largest retail financial services and telco companies around the world. This company has about a $500 million market cap and was recently able to sign a $20 million initial contract deal with Citigroup. They have also closed a couple of other $10 million plus deals. We think those are few and far between in today's age, especially for a company not a part of the big four. We continue to believe it is attractively valued. They have had a lot of SEC reporting and stock-option issues, and all of that has been cleaned up. They have a great pipeline and forward-looking Java-based technology that their largest companies absolutely love, whether it is European banks like ABN AMRO, Barclays and Lloyds, or banks out here like Citi.

TWST: Is that what has allowed them to break into this market?

Mr. Wood: Certainly signing up Citigroup is going to be a very strong customer to reference to penetrate some of the other large banks out here like Bank of America and Washington Mutual. They also won a deal with Cigna in the healthcare insurance market, which is a fairly new market for them. We are already hearing some interest in Chordiant Software with the other major players in the healthcare insurance market. North America is a new market for them. Prior to the last two or three years, they historically sold into Europe. We wouldn't be surprised if they become the de facto technology standard for call center technology across the financial services vertical in the US.

TWST: So things in this business can still change fairly rapidly if somebody comes with a better mousetrap.

Mr. Wood: Right. Some might think that call center applications are not a very exciting industry to be in, but with a lot of M&A in the financial services arena, there is a lot of data that's siloed in various repositories that's difficult to get into. So Chordiant will layer on a platform on top of legacy call center applications and make it very easy to tap into any repository from one application. They do have a platform, and they are building application modules on top of it to improve the productivity of call center reps when they are on the phone with a customer. They just released a predictive analytic solution that will guide a call center agent on how to cross-sell a new product to a customer who is on the phone, given what they are looking for at the moment and their historical background. It calculates that in real time and makes call center reps much more productive.

CHRD 1-yr chart