Strong Performance Today In Computer Software & Services From Red Hat Inc. (RHT)

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.

Red Hat ( RHT) pushed the Computer Software & Services industry higher today making it today's featured computer software & services winner. The industry as a whole closed the day down 0.5%. By the end of trading, Red Hat rose 56 cents (1.1%) to $50.55 on average volume. Throughout the day, 2.6 million shares of Red Hat exchanged hands as compared to its average daily volume of 2.5 million shares. The stock ranged in a price between $49.63-$50.56 after having opened the day at $49.68 as compared to the previous trading day's close of $49.99. Other companies within the Computer Software & Services industry that increased today were: Active Network ( ACTV), up 10.5%, TigerLogic Corporation ( TIGR), up 5.8%, China Information Technology ( CNIT), up 5.5%, and inContact ( SAAS), up 5%.
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Red Hat, Inc. provides open source software solutions to enterprise customers worldwide. The company also offers enterprise-ready open source operating system platforms. Red Hat has a market cap of $9.57 billion and is part of the technology sector. The company has a P/E ratio of 66.9, above the S&P 500 P/E ratio of 17.7. Shares are down 5.6% year to date as of the close of trading on Thursday. Currently there are 16 analysts that rate Red Hat a buy, one analyst rates it a sell, and nine rate it a hold.

TheStreet Ratings rates Red Hat as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

On the negative front, DynaVox ( DVOX), down 28.6%, Infosys ( INFY), down 20.8%, TSR ( TSRI), down 7.8%, and Webmedia Brands ( WEBM), down 6.9%, were all laggards within the computer software & services industry with Cognizant Technology Solutions Corporation ( CTSH) being today's computer software & services industry laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the computer software & services industry could consider iShares S&P NA Tech Software Idx ( IGV) while those bearish on the computer software & services industry could consider ProShares Ultra Short Technology ( REW).

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