Red Hat Inc. (RHT): 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

Red Hat ( RHT) pushed the Technology sector lower today making it today's featured Technology laggard. The sector as a whole closed the day up 0.2%. By the end of trading, Red Hat fell $0.64 (-1.3%) to $48.61 on light volume. Throughout the day, 1,899,748 shares of Red Hat exchanged hands as compared to its average daily volume of 2,605,800 shares. The stock ranged in price between $48.10-$49.40 after having opened the day at $49.38 as compared to the previous trading day's close of $49.25. Other companies within the Technology sector that declined today were: Intelsat ( I), down 62.6%, Deltathree ( DDDC), down 30.0%, Affymetrix ( AFFX), down 9.4% and Park City Group ( PCYG), down 9.4%.
  • EXCLUSIVE OFFER: Jim Cramer's Protege, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

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 $9.5 billion and is part of the computer software & services industry. The company has a P/E ratio of 66.4, above the S&P 500 P/E ratio of 17.7. Shares are down 7.0% year to date as of the close of trading on Friday.

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 positive front, Power-One ( PWER), down 56.7%, Webmedia Brands ( WEBM), down 24.6%, Voltari ( VLTC), down 20.0% and Performance Technologies ( PTIX), down 18.3% , were all gainers within the technology sector with Qualcomm ( QCOM) 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).

Exclusive Offer: Jim Cramer's 'go-to' small/mid-cap guru Bryan Ashenberg only buys stocks he thinks could return 50-100%. See his top picks for 14-days FREE.
null

If you liked this article you might like

Pret A Manger Takeover in the Works; Cisco's M&A Shackles Come Off - ICYMI

John Chambers' Exit From Cisco Could Pave the Way for Big Moves

Jim Cramer on Nordstrom's Plans to Go Private

Cramer: This Rally Isn't Without Meaning

How Microsoft and Other Software Giants Are Growing in a Cloud-Focused World