Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

14 Cloud Stocks: Who Will Rule, Who Will Fade Away?


Cloud computing remains the big story in tech, and there are still a lot companies entering the sector... just be particular when you're buying.

Gregg Early: Well, it sounds like the cloud continues to grow. It doesn't seem like it's gotten old enough yet where there's a great deal of consolidation or the bigger players have snapped up. There seems to be a thousand flowers flourishing there. So do you see this as the trend for the next couple of years or so?

Rob DeFrancesco: Yep. The thing is, there have been some acquisitions there, and the ones that are left, a lot of them are pricey. I mean NetSuite is an expensive company.

There is also Workday (NYSE:WDAY), which became public last year and has cloud-based financial and HR software. They're mainly financial, but have been moving more into HR. These are expensive companies. So I don't see a lot buyers offering them a big premium for these. I think a lot of the names have been grabbed up. So, with the cloud name you can get a pullback in the stock. That's a good way to play it.

NetSuite is a great company. I think it's expensive here, around $70 a share; but if for some reason you get a pullback, that would be a good way to play the cloud. I think there will still be acquisitions, but I don't know. I think a lot of the good names were scooped up in 2012.

Gregg Early: Yeah, so they're now fully valued. It's like a lot of markets.

Rob DeFrancesco: Yeah.

Gregg Early: The hard part's the market where you really have to look at each stock individually to find out if there's any value there....

Rob DeFrancesco: Right. I mean recently, Goldman Sachs downgraded NetSuite, and there's another company called Ultimate Software (NASDAQ:ULTI), which is cloud-based human capital management, and they downgraded those to neutral on valuation.

They still like Cornerstone OnDemand because of its high top-line growth. So, yeah, I think a lot of investors they like the idea of the cloud, but they don't want to pay out for these names, these valuations.

Below, find some more great investing and trading content from MoneyShow:

4 Top Techs in Buy Range

3 Stocks for the Nuke Revival

The Top ETFs for 2013

Twitter: @TopProsTopPicks
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos