Rackspace Hosting Inc. (RAX): Today's Featured Internet Winner

Rackspace Hosting ( RAX) pushed the Internet industry higher today making it today's featured internet winner. The industry as a whole closed the day up 0.8%. By the end of trading, Rackspace Hosting rose 71 cents (1.3%) to $53.91 on light volume. Throughout the day, 1.1 million shares of Rackspace Hosting exchanged hands as compared to its average daily volume of 2.4 million shares. The stock ranged in a price between $52.98-$54.08 after having opened the day at $53.12 as compared to the previous trading day's close of $53.20. Other companies within the Internet industry that increased today were: Remark Media ( MARK), up 9.3%, ModusLink Global Solutions ( MLNK), up 7.8%, TheStreet ( TST), up 5.2%, and MeetMe ( MEET), up 4.8%.

Rackspace Hosting, Inc. provides cloud computing services, managing Web-based IT systems for small and medium-sized businesses, and large enterprises worldwide. Rackspace Hosting has a market cap of $7.23 billion and is part of the technology sector. The company has a P/E ratio of 82.2, above the average computer software & services industry P/E ratio of 79.8 and above the S&P 500 P/E ratio of 17.7. Shares are up 23.7% year to date as of the close of trading on Tuesday. Currently there are nine analysts that rate Rackspace Hosting a buy, no analysts rate it a sell, and eight rate it a hold.

TheStreet Ratings rates Rackspace Hosting as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the negative front, ExactTarget ( ET), down 3.6%, Groupon ( GRPN), down 3.5%, Move ( MOVE), down 2.7%, and Friendfinder Networks ( FFN), down 2.5%, were all laggards within the internet industry with SINA Corporation ( SINA) being today's internet industry laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the internet industry could consider First Trust Dow Jones Internet Idx ( FDN) while those bearish on the internet industry could consider ProShares Ultra Short Technology ( REW).
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