BMC Software Inc. (BMC): Today's Featured Technology Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

BMC Software ( BMC) pushed the Technology sector lower today making it today's featured Technology laggard. The sector as a whole closed the day up 0.5%. By the end of trading, BMC Software fell $1.06 (-2.5%) to $41.49 on average volume. Throughout the day, 1.6 million shares of BMC Software exchanged hands as compared to its average daily volume of 1.4 million shares. The stock ranged in price between $41.14-$42.20 after having opened the day at $42 as compared to the previous trading day's close of $42.55. Other companies within the Technology sector that declined today were: Meade Instruments Corporation ( MEAD), down 14.9%, Aehr Test Systems ( AEHR), down 11.4%, Kingtone Wirelessinfo Solution ( KONE), down 10.8%, and China Mobile Games and Entertainment Group ( CMGE), down 10.6%.
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BMC Software, Inc. develops software that provides system and service management solutions for enterprises in the United States and internationally. BMC Software has a market cap of $6.77 billion and is part of the computer software & services industry. The company has a P/E ratio of 20, above the average computer software & services industry P/E ratio of 19.9 and above the S&P 500 P/E ratio of 17.7. Shares are up 29.8% year to date as of the close of trading on Friday. Currently there are eight analysts that rate BMC Software a buy, no analysts rate it a sell, and three rate it a hold.

TheStreet Ratings rates BMC Software as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, increase in stock price during the past year, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, Internet Gold Golden Lines ( IGLD), up 27.3%, B Communications ( BCOM), up 26.5%, DynaVox ( DVOX), up 23.6%, and Clearwire ( CLWR), up 15.9%, were all gainers within the technology sector with Texas Instruments ( TXN) being today's featured technology sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the technology sector could consider Technology Select Sector SPDR ( XLK) while those bearish on the technology sector could consider ProShares Ultra Short Technology ( REW).

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