Rackspace Hosting Inc. (RAX): Today's Featured Computer Software & Services Winner

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Rackspace Hosting ( RAX) 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 0.3%. By the end of trading, Rackspace Hosting rose $3.63 (8.2%) to $47.85 on heavy volume. Throughout the day, 6,775,690 shares of Rackspace Hosting exchanged hands as compared to its average daily volume of 2,196,400 shares. The stock ranged in a price between $46.88-$49.50 after having opened the day at $48.71 as compared to the previous trading day's close of $44.22. Other companies within the Computer Software & Services industry that increased today were: BOS Better Online Solutions ( BOSC), up 30.9%, Tableau Software Inc Class A ( DATA), up 11.3%, KongZhong Corporation ( KONG), up 8.3% and Kingtone Wirelessinfo Solution ( KONE), up 7.5%.

Rackspace Hosting, Inc., through its subsidiaries, 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 $6.2 billion and is part of the technology sector. Shares are down 40.5% year to date as of the close of trading on Thursday. Currently there are 6 analysts that rate Rackspace Hosting a buy, 2 analysts rate it a sell, and 12 rate it a hold.

TheStreet Ratings rates Rackspace Hosting 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 good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

On the negative front, Merge Healthcare ( MRGE), down 46.0%, FalconStor Software ( FALC), down 9.0%, Commtouch Software ( CTCH), down 7.6% and ChyronHego ( CHYR), down 6.8% , were all laggards within the computer software & services industry with Nuance Communications ( NUAN) 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).

3x UPSIDE POTENTIAL: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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