Red Hat, Inc. (RHT)

I'm a big believer in RHT (I use their products every chance I can.) The stock price is right about where I believe it should be...

...which is a bad thing in the short term. How many companies can you name remain at their "ideal" price? Something always kicks it one way or another.

Red thumb until: Recovery is seen as a definite; short-term crash happens (and tech stocks will take a bigger hit and lead the way); or some seriously good news comes out of RHT about domestic or foreign government contracts.

At that point, I'll be all green thumb.

Overvalue. Great company. PE is too high.

It will be awhile for Red Hat

Red hat consistently has underperformed the last several weeks, I think it will continue to do the same.

can't catch up to p/e of 50

Don't get me wrong, I love Red Hat's Linux OS. However, as a business model Open Source is hard to sell. Companies end up choosing to do 'service contracts'... its not as viable as actually selling licenses, which is what MS does. In the end, the customers who make the margin for MS are small business owners. Small business owners, when they choose Linux, they forgo the service contracts to save cash, and Red Hat therefore doesn't see any money from that customer.

If Red Hat moved to a small payment structure (even $25-50 a licensee), I believe their community members would pay it, and I would revisit this pick. Also, non-technical, the P/E is too high.

After seeing Windows Server 2008, I believe that emerging markets will look more favorably on Windows solutions rather than a Linux one. Microsoft got a lot of things right with 2008 and while I'm sure it has its fair share of bugs, it's all about the sale.

I just don't see Linux ever moving on from where it is now.

lacking leadership quality after this next shakedown

Ubuntu and true free Linux alternatives will make Red Hat pointless.

They sell a free product. Please explain that business model.

People pay for Linux?

I like RHT but it is now on my underperform list.

The hype about Linux is going away. As Linux is moving away from a niche solution and becomes fully capable operating system the issues traditionally associated with Microsoft Windows begin to creep in. Instability, lack of centralized management and monitoring all begin to play bigger part.

They made a company....based upon open source material.

That's like developing drugs for immediate production by generics companies. Let google and the indie programmers handle the open source, guys.

While open source is a very attractive development model, it is not a profitable business model in the long run. A PE at almost 70 is scary for such a business.

All the big players are going to be looking at the Redhat model and seeing ways they can do it better and for less.

Red Hat was and is a one shot wonder - and that shot has been discharged.

Growth is nice with this company, but they have greatly increased spending, and killed their income. With the addition of Oracle as a support competitor, and the publicity for Novell's SUSE linux, I think this company will see its revenue growth slow down. It already looks overvalued.