RHAT - after $6, no resistance to $12 on longer chart...one to watch anyway. It obviously needs a friendly market and some buying interest. It certainly won't get to $12 very quickly but in the next quarter or so, it's got a shot if it beats estimates for the 7th time in a row.
20 day m.a. = $5.50
50 day m.a. = $6.10 or so
200 day m.a. = $12
That's what I see. Anyone else got more technical info than that? Bottom line - I am watching and seeing little downside risk.
09-Apr-01
06:58 ET Linux Stocks (OPENX) : WSJ reports that the Linux operating system continues to gain acceptance in the corporate community. According to article, Linux garnered a 27% share of operating system software for computer servers sold last yr (compared to 41% for Window 2001), up from 24% in 1999 and 17% in 1998. An IDC survey found that 20% of corporations were using Linux in some fashion... Stocks to watch: RHAT, LNUX, CALD.
Red Hat (RHAT) 5 7/32: This developer of open-source software based on the Linux operating system is up 20% in the pre-market after reporting breakeven FebQ results, a penny better than the First Call consensus on revenue of $27 mln, up 106% yoy and 21% sequentially. Revenues came in better than expected due mainly to the contribution of the recent Planning Technologies acquisition. Despite lower gross margins with a greater services mix, the company's operating loss continued to narrow as a result of tight cost controls and leverage of infrastructure investments. As a result, Goldman Sachs raised its fiscal 2002 EPS estimate to $0.06 from $0.04. The new estimate reflects reduced revenue growth (62% vs.77% previously) but an accelerated path to profitability...When one reflects on stocks that popped with the Internet bubble, Red Hat has to be one that comes to mind. In early 2000, RHAT traded at over $140 per share. The sell-off in the shares is most attributable to the declining stock prices of its counterparts in the Internet infrastructure space. It has not been because the company has missed financial targets. In fact, RHAT has met estimates in each of its six quarters as a publicly traded company. The company has over $300 mln, or $1.87 per share, in cash/short term investments with zero long term debt. Granted, Red Hat is a bellwether for the Linux industry and is considered by analysts to be the strongest company devoted to the comparatively new operating system. In fact, it was the first Linux company to go public, managing to squeeze in two stock offerings before the Linux space blew up. Even though the stock is hovering around $5, the company still has a lot of shares outstanding which increased with the secondary offering. Currently, there are 161.5 mln shares outstanding equating to a market cap of $825 mln. With only $84 mln in sales this past year, RHAT is trading at a price-to-sales LTM of almost 10x. Due to its lack of debt, RHAT has a book value of $2.85 for a price-to-book of 1.8x. However, Briefing.com does not see any near-term positive catalyst to propel the stock, so today might be a good day for long term holders to consider cutting losses. -- Robert J. Reid, Briefing.com |
