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Rackspace Hosting, Inc. Message Board

  • mouseroared mouseroared May 17, 2010 1:15 PM Flag

    Market deflation

    RAX a buy at low dip; $12.00-$10.00? IS this price range a buy or will go down further?
    Cloud computing future big. RAX rank in top 5?
    ADVICE from knowledgeable-informed in this field appreciated.
    Thank you.

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    • 20 day ma under 200 day ma, not a good chart...sell

    • Mouse, the information you just received from "opalocka" would cost a tidy sum sitting across from a broker, assuming they knew half as much as she does, which I doubt they would. IMO, RAX, arguably, owns cloud computing (figuratively of course) and they really do live and breath fanatical support. Client's rarely, if ever frankly, leave after a taste of the service they get.

      Speaking for myself, service is everything and the only thing that separates many companies in the highly competitive world of IT. Good Luck..J.

      • 1 Reply to john_mrks
      • I enjoy the didactic style of opa...'s commentarties, however dont read too much into endorsement of her posts.

        In reality despite Rackspace being one of the best managed hosting copmanies, RAX's stock price got way ahead of its financial performance. At $10 per share it would have a PE of 38 which is very high for a company with sub 20% growth rate. Analysts are predicting higher growth rates down the road; I do not believe that they (or anyone else) can predict RAX's change in performance with any useful degree of certainty.

        In stocks there are three positions one can take:
        1. Go long
        2. Go short
        3. Do nothing

        Based on your position of being neutral, I would recommend staying that way, as RAX's future performance is anything but certain.

    • Dear Mouse,

      Since no one has responded to your questions yet, may I be the first?

      "RAX a buy at low dip; $12.00-$10.00?"

      It's been a long standing custom of mine to purchase stocks with the BEST EPS, the BEST RS, the BEST in its industry group, the BEST looking technical/fundamentals. I bought RAX in August, 2009 when those parameters were apparent in RAX. When those parameters take a negative change, which begin to adversely affect the stock's price, it's time to sell.

      Don't ever be in a position where you give your hard-earned profits back. Remember that if you give back 50% of your investment...it takes 100% to just break EVEN! Have you bought many stocks that go up 100% in a year? Recently?

      Buying investment securities "at the bottom" because they're cheap is the neophyte investor's road to financial ruin. Seek out quality; don't let your prime prerequisite be that of price alone. That's just my opinion...I'm offering it to you [for what its worth] in the hopes of saving you some grief. However, since you did NOT ask for that, I will give you my best idea on what you have requested...

      "IS this price range a buy or will go down further?"

      RAX should hold somewhere in the $13-14 area, yet in a market like the one we're experiencing, nothing is assured. If it breaks that support, I cannot tell you how far it will drop, since my daily chart of RAX goes back to June, 2009 and no further. If RAX breaks $13, why would you want to consider it a "buy"? For that matter, why buy here unless you're [or hope to be] a "long term" employee of RAX?

      "Cloud computing future big. RAX rank in top 5?"

      I sold RAX in the $20 range, so I will defer to others on this question which, no doubt, will fill this post with responses.

      Best wishes,

      Me

 
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