The software sector is starting to heat up in a serious way, and many market participants are missing out on the action.
Jim Cramer brought attention to the under-the-radar move in the sector on Thursday's "Stop Trading!" segment on CNBC. Cramer told viewers that the software stocks are exploding here, and you don't hear a word about them. He mentioned that names such as Oracle (ORCL), Microsoft (MSFT) and Salesforce.com (CRM) are starting to get very active to the upside.
The big names in the space such as Microsoft and Oracle aren't the only ones that are starting to advance. Just take a look at the action in smaller-cap companies such as Merge Healthcare (MRGE), up 195% on the year, or LivePerson (LPSN), up 91%. This clearly demonstrates that investors are bargain-hunting in many of the beaten-down names and finding value as the big and small companies are being bid up to higher prices.
The software complex is also starting to heat up from an M&A standpoint. Data-storage giant and software maker EMC (EMC) is battling it out with competitor NetApp (NTAP) to buy storage appliance and software firm Data Domain (DDUP) for at least $1.8 billion. Just last week, Intel (INTC) said it would buy testing and development software maker Wind River Systems (WIND) for $884 million.There are even rumors that Dell (DELL) is actively looking to do some deals to expand its portfolio in storage-related hardware, software and services. Like many large-cap tech companies, Dell is sitting on billions in cash that could be best put to work by buying up cheaper tech companies at depressed levels. Some rumors have Dell looking to buy out Palm (PALM) and some other potential targets include Emulex (ELX) and QLogic (QLGC). Considering the M&A activity and the positive price action in the software sector, how should investors look to play this space? Let's take a look at a few software stocks that look enticing based off of their charts. To read more, visit Stockpickr.com.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV