Thursday, December 17, 2009

Bookkeeping: Beginning Positions in Sourcefire (FIRE) and Rackspace Hosting (RAx)

A couple of breakouts caught my eye yesterday - Sourcefire (FIRE) and Rackspace Hosting (RAX).  Both are very expensive stocks but valuation seems to mean little nowadays; so I am going more on technicals rather than anything.   I do like the core businesses of both (IT security & hosting / cloud computing respectively).

Both are breaking out of multi month consolidation periods and as we have been saying for the S&P 500, the larger the base the bigger the ensuing move.  Of course for these moves to continue we will need the overall market to be benign.... no sure thing.

Sourcefire is a $700M market cap, with volume bursting nicely the past 2 sessions after trading between $19 and $24 for the better part of 3 months.

Sourcefire, Inc. provides enterprise threat management and intelligent security infrastructure solutions in the United States and internationally.

Rackspace is a $2.7B market cap, same volume increase of late after trading from $17 to $20 from late September to late November.

Rackspace Hosting, Inc. provides information technology (IT) as a service, manages Web-based IT systems for small and medium-sized businesses, as well as large enterprises worldwide. The company offers a suite of hosting and cloud computing services.

I am beginning starting stakes of 1-1.2%% into both stocks, and see if these budding moves can hold.  I am buying Rackspace in the $21.80s and Sourcefire around $25.50.  I will do more comprehensive write ups on these names when I have some more time, but we touched on Rackspace Hosting in this post [Jul 29, 2009: Colocation Stocks and Industry Overview]

Long both names in fund; no personal position

Disclaimer: The opinions listed on this blog are for educational purpose only. You should do your own research before making any decisions.
This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses you might sustain from the content provided.

Copyright @2012