The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- Quest Software ( QSFT), Progress Software ( PRGS), Ebix ( EBIX) and Actuate ( BIRT) are among a few companies in the $584 billion application software industry. The industry is currently trading at a P/E of 18.3 with a return on equity of 24.4% and a dividend yield of 1.6%.

These companies have reported strong quarterly results and a positive outlook going forward. Furthermore, these stocks have no sell ratings and carry significant upside potential, according to analysts' 12-month price target polled by Bloomberg.

Starting on the next page are the stocks ordered in terms of upside, great to greatest.

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