Nuance Communications Inc. (NUAN): Today's Featured Computer Software & Services Winner

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

Nuance Communications ( NUAN) 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, Nuance Communications rose $0.19 (1.0%) to $18.98 on light volume. Throughout the day, 3,796,830 shares of Nuance Communications exchanged hands as compared to its average daily volume of 5,918,400 shares. The stock ranged in a price between $18.75-$19.10 after having opened the day at $18.78 as compared to the previous trading day's close of $18.79. Other companies within the Computer Software & Services industry that increased today were: China Information Technology ( CNIT), up 14.7%, Responsys ( MKTG), up 8.8%, BOS Better Online Solutions ( BOSC), up 8.0% and Merge Healthcare ( MRGE), up 7.3%.
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Nuance Communications, Inc. provides voice and language solutions for businesses and consumers worldwide. Nuance Communications has a market cap of $6.0 billion and is part of the technology sector. The company has a P/E ratio of 40.4, above the S&P 500 P/E ratio of 17.7. Shares are down 14.9% year to date as of the close of trading on Monday. Currently there are 7 analysts that rate Nuance Communications a buy, no analysts rate it a sell, and 9 rate it a hold.

TheStreet Ratings rates Nuance Communications as a hold. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.

On the negative front, Marketo ( MKTO), down 8.0%, Salesforce.com ( CRM), down 7.9%, Wave Systems Corporation ( WAVX), down 6.5% and Unwired Planet ( UPIP), down 5.0% , were all laggards within the computer software & services industry with Microsoft Corporation ( MSFT) 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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