This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Tech Stocks to Profit From Commodity Shock

Stocks in this article: PRO ARBA ECHO

By Tom Taulli

NEW YORK ( TheStreet) -- Commodities prices have surged, sending a shock wave through companies that rely on them, including manufacturers, apparel makers and food producers.

The commodities boom has been great for investors. (Read Can October's Best-Performing Commodities Continue Their Run?) However, commodity-dependent companies' profit margins are being squeezed, pressuring stock prices.

As a result, companies are trying to use technologies to improve their cost structures and streamline operations -- supply-chain management, better sourcing and enhanced pricing strategies. And companies that can provide those services stand to profit. Here's a look at three:

1. PROS Holdings (PRO - Get Report): This company develops enterprise software that allows large companies to optimize their pricing. That involves processing huge amounts of data in real-time and then applying complex formulas. The upshot is that PROS technology can help companies not only with setting the best prices but also when to give discounts, increase shipping charges or provide promotions.

Even a small increase in prices -- if done correctly -- can have a major impact on a company's profits. This is especially important in the current economic environment, where it can be difficult to pass on price increases to consumers.

While 2009 was a difficult year for PROS, the fundamentals have been much better this year. The company has taken strides to make its software easier to implement, which is a key for getting new customers.

Despite all this, PROS still is showing declining revenue (according to its latest quarterly report) and is unprofitable. Because of the large expense of its software, it will likely take some time to get more traction.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs