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Top 3 Big-Data Stocks for 2012


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Market Cap: $11.51 billion

Teradata, which has recently been hitting 52-week highs, is perfectly positioned for the big data boom.

"They have been in the big data business for a long, long time," Greg McDowell, an analyst at JMP Securities, said. "They are the leading data warehouse vendor."

"Teradata's data warehousing solutions have long been highly regarded and the company should be considered a major big data competitor," agreed Pund-IT's King. The San Diego-based company, he noted, added text analytics to its data warehousing offerings in 2010, bolstering its big data story.

Last year Teradata also bought software maker Aster Data, which specializes in analyzing unstructured data. "The primary reason for the acquisition wasn't to drive short-term revenue and operating income," explained Teradata CEO Michael Koehler, during the company's recent fourth-quarter conference call. The deal, he added, was more about moving big data out of its current e-commerce niche into the mainstream market.

Teradata is certainly on an upward trajectory, as evidenced by the company's recent record fourth quarter and full-year results. The Atlanta-based firm has also grown its customer base by more than 50% over the past four years, increased its revenue by almost $600 million and nearly doubled its market cap.

Set against this backdrop, Teradata shares have climbed more than 40% this year. Technical analysis of the stock, however, suggests that it's still somewhat undervalued and has more room to grow.

"Our overall sense is that the demand environment remains healthy for Teradata's solutions and that the company remains comfortable with its first-quarter guidance of 'good revenue growth' and full year expectations of 10% to 12% revenue growth (11% to 13% at constant currency)," explained JMP's McDowell, in a recent note. "We continue to like Teradata because it is the leading data warehousing vendor and we believe it stands to benefit from the big data trend more than any other technology vendor."

JMP rates Teradata 'market outperform' and has a $72 price target on the stock.

TheStreet Ratings rates Teradata 'buy', citing the firm's revenue growth, compelling growth in net income, and its solid financial position.

--Written by James Rogers in New York.

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