Although some of the cloud computing hype has probably worn off in favor of hype surrounding 3D printing, its still a big tech story, but small cap cloud computing stocks SPS Commerce, Inc. (NASDAQ: SPSC), ClickSoftware Technologies (NASDAQ: CKSW), Active Network (NYSE: ACTV) and Cloud Star Corp (OTC: CLDS) have largely been overlooked or have not yet had the big run-ups putting them into mid-cap territory. To begin with, cloud computing is one of those buzz words with a somewhat nebulous meaning. So perhaps the best definition of cloud computing is simply what Wikipedia says it is: The use of computing resources (hardware and software) that are delivered as a service over a network – usually being the Internet. Obviously there are plenty of big large cap tech players like Amazon (NASDAQ: AMZN) and Google (NASDAQ: GOOG) in the cloud computing space but the following are a couple of cloud computing stocks you might not be so familiar with:
- SPS Commerce, Inc. A leader in on-demand supply chain management solutions focused on the retail marketplace, small cap SPS Commerce provides prewired, proven integrations and comprehensive retail performance analytics to thousands of customers worldwide. Back in February, SPS Commerce reported 42% revenue fourth quarter growth from $15.9 million to $22.5 million, 47% recurring revenue growth and net income of $366,000 verses $13.1 million for the previous year due to a $12.8 million tax benefit. SPS Commerce’s CEO note that the company is sitting at the forefront of chain evolution as retailers and suppliers adapt to new technologies to meet greater consumer demands. On Thursday, SPS Commerce rose 1.98% to $42.67 (SPSC has a 52 week trading range of $23.09 to $42.84 a share) for a market cap of $632.06 million plus the stock is up 185 since the start of the year, up 60.7% over the past year and up 206.8% since April 2010.
- ClickSoftware Technologies. An Israel provider of software products and solutions for workforce management and optimization for the service sector, small cap ClickSoftware Technologies generates revenues from the licensing of its software products, the provision of consulting and support services and from cloud-based solutions under software as a service (SaaS) model. On Thursday, ClickSoftware Technologies fell 0.62% to $8.04 (CKSW has a 52 week trading range of $6.81 to $13.00 a share) for a market cap of $252.21 million plus the stock is down 6% since the start of the year, down 37.3% over the past year and up 173.8% over the past five years. However, there is reason to believe ClickSoftware Technologies is going to have a better 2013 as last year, the company increased its workforce by 25% by adding about 100 employees because it gained 10 new customers and its revenue guidance of $120 million to $125 million for the year beat the Wall Street consensus. Moreover, it appears ClickSoftware Technologies investments in itself will lead to higher growth and better earnings.
- Active Network. With deep expertise in so-called Activity and Participant Management, the Active Network’s technology powers the world’s activities and through online destinations such as ACTIVE.com which connects people with the things they love to do. The company currently serves over 50,000 global customers driving over 80 million transactions annually. On Thursday, the Active Network rose 2.70% to $4.19 (ACTV has a market cap of $3.97 to $17.24 a share) for a market cap of $255.40 million, but the stock is down 12.7% since the start of the year and down 75% over the past year. In the middle of February, Active Network sank after reporting a 23% revenue increase to $93.7 million because that figure was below the Wall Street consensus of $95.22 million. Nevertheless, Active Network’s CEO pointed out that its cross-selling efforts gained momentum as the company added Fortune 500 customers. In addition, Active Network’s CEO noted the company generated positive operating cash flow of $27 million and ended the year with a strong balance sheet. So perhaps Wall Street’s expectations were too high.
- Cloud Star Corp. A provider of security, technology and other products to the technology marketplace, Cloud Star Corp operates in the remote access computing sector and has developed patent-protected remote access security devices such as MyComputerKey™. Specifically, the MyComputerKey is a USB device that inserts into a home computer to allow access to a remote Machine or a Cloud based environment. Cloud Star Corp is making Improvements to the device by implementing biometric authentication as a backup just in case passwords are compromised. The MyComputerKey is now being tested and evaluated by several corporations and cloud computing innovators. Once these tests are completed, Cloud Star Corp will introduce the MyComputerKey consumer product into the consumer marketplace while an enterprise version for corporations that rely on a mobile workforce is also in the advanced stages of development. On Thursday, Cloud Star Corp rose 8.49% to $1.15 (CLDS has a 52 week trading range of $0.11 to $1.47 a share) for a market cap of $111.78 million plus the stock is up an impressive 858.3% since the start of the year and up 76.9% over the past five years (albeit, it appears to not always have been trading).
In other words, if you are looking for a way to cash in on cloud computing that does not involve a large cap stocks, small cap cloud computing stocks SPS Commerce, Inc., ClickSoftware Technologies, Active Network and Cloud Star Corp might be a good bet.