Tag - Actu

The Russell 2000 (NYSE: IWM) and the Dow Jones Industrial Average (INDU) are in the red due to news of poor earnings and concerns that interest rates will not fall. At 1:35 p.m. ET, the small-cap index had shed 2.78 points, or 0.34%, to 818.94. The Dow was off 40.88 points, or 0.29%, to 13,829.38.

Investors hoping for a sizeable drop in the U.S. Federal Reserve’s target interest rate may be disappointed, according to an article in The Wall Street Journal. The paper claims that policy makers, who kicked off their two-day meeting this morning, will likely either cut the federal funds rate 0.25% or leave it unchanged.

That was enough to scare away the bulls, and stocks opened in negative territory.

Contributing to the bearish mood was news that United States Steel Corp.’s (NYSE: X) third-quarter net income missed analysts’ projections by falling 35% due to costs associated with an acquisition.

Cincinnati, Ohio-based consumer goods giant The Procter & Gamble Co. (NYSE: PG) also had bad news to report, saying that its profit margin will come under pressure in the coming months due to higher energy costs.

Shares of Actuate Corp. (Nasdaq: ACTU) have hit a new 52-week high on news after the close on Monday that the maker of business services software booked a record third-quarter profit.

Net income for the three months ended Sept. 30 was $6 million, or $0.09 per share, compared with a net income of $4.5 million, or $0.07 per share, a year earlier. Analysts were looking for earnings of $0.08 per share, on average.

The San Mateo-based company also reported that total revenues increased 9% to $34.7 million, in line with Wall Street’s forecast of $34.6 million in revenue. Actuate posted a revenue of $31.8 million during the third quarter of 2007.

The increase was mainly due to a 16% rise in license revenue, which came to $13.4 million from $11.6 million a year ago.

“Actuate extended the number of consecutive quarters of double digit year-over-year growth for both license revenue and non-GAAP net income to seven in the third quarter,” said president and CEO Pete Cittadini in a statement.

Investment bank JMP Securities responded by upgrading the company’s shares to “market outperform” from “market perform”.

At 12:30 p.m. ET, shares of Actuate Corp. (ACTU) were up $1.15, or 16%, to $8.53. The previous 52-week high was $7.95, which was reached on Oct. 29. The 52-week low of $4.82 was touched on Jan. 19.

Two strategies for making a profit on stocks: 1) buy a deeply discounted stock and hope for a rebound, and 2) pick a stock at or near its highs, in the belief that if things are good now, they can only get better.

The two business software makers profiled here fall squarely under that second investment strategy. Their stocks have already enjoyed a good run, but demand for their products is still gaining momentum, suggesting they have further to go before they peak.

When it comes to business, or enterprise software, there are the very largest companies like International Business Machines (NYSE: IBM) or SAP AG (NYSE: SAP), and there are a host of smaller firms that make add-on products designed to help companies further organize their data. These products generally help businesses sort data into more understandable formats like brief summaries, charts or graphs. They often add analytic features for better understanding the data and additional services for retrieving it and sharing it securely.

The more material that companies store, the more challenged they are to organize all of it, which is why software makers like DataWatch Corp. (Nasdaq: DWCH) and Actuate Corp. (Nasdaq: ACTU) have generated so much investor interest. The proliferation of cheap storage technology means that most companies are swimming in data. Imagine trying to retrieve some basic company statistics from a roomful of old metal filing cabinets jammed with paper, and you get some sense of the challenge of organizing electronic files.