Traders Buy Rackspace Hosting Inc. (RAX) on Weakness Following Insider Selling
Investors purchased shares of Rackspace Hosting Inc. (NYSE:RAX) on weakness during trading hours on Tuesday after an insider sold shares in the company. $18.97 million flowed into the stock on the tick-up and $9.36 million flowed out of the stock on the tick-down, for a money net flow of $9.61 million into the stock. Of all stocks tracked, Rackspace Hosting had the 28th highest net in-flow for the day. Rackspace Hosting traded down ($0.01) for the day and closed at $31.79Specifically, COO Mark Roenigk sold 5,000 shares of the firm’s stock in a transaction dated Monday, October 17th. The shares were sold at an average price of $31.78, for a total value of $158,900.00. Following the transaction, the chief operating officer now directly owns 174,697 shares in the company, valued at approximately $5,551,870.66. The transaction was disclosed in a legal filing with the SEC, which is available at this link. 15.50% of the stock is currently owned by insiders.
RAX has been the topic of several recent research reports. JMP Securities downgraded shares of Rackspace Hosting from an “outperform” rating to a “market perform” rating in a research report on Friday, August 26th. Jefferies Group lifted their price objective on shares of Rackspace Hosting from $23.00 to $32.00 and gave the company a “hold” rating in a research report on Monday, August 29th. Zacks Investment Research upgraded shares of Rackspace Hosting from a “hold” rating to a “buy” rating and set a $36.00 price objective on the stock in a research report on Tuesday, October 11th. Royal Bank Of Canada lifted their price objective on shares of Rackspace Hosting from $26.00 to $33.00 and gave the company an “outperform” rating in a research report on Wednesday, August 10th. Finally, FBN Securities lifted their price objective on shares of Rackspace Hosting from $21.00 to $26.00 and gave the company a “sector perform” rating in a research report on Tuesday, August 9th. Two research analysts have rated the stock with a sell rating, eighteen have given a hold rating and five have assigned a buy rating to the stock. The company has an average rating of “Hold” and an average target price of $29.03.
The company’s 50-day moving average price is $31.60 and its 200-day moving average price is $26.06. The stock has a market capitalization of $4.00 billion, a P/E ratio of 27.98 and a beta of 1.66.
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Rackspace Hosting (NYSE:RAX) last posted its earnings results on Monday, August 8th. The hosting company reported $0.38 EPS for the quarter, topping analysts’ consensus estimates of $0.22 by $0.16. The company had revenue of $489.40 million for the quarter, compared to the consensus estimate of $521.07 million. Rackspace Hosting had a return on equity of 16.80% and a net margin of 7.39%. The firm’s revenue for the quarter was up 7.0% on a year-over-year basis. During the same period in the previous year, the business earned $0.20 earnings per share. On average, equities analysts expect that Rackspace Hosting Inc. will post $1.07 earnings per share for the current year.
Large investors have recently bought and sold shares of the company. Advisory Services Network LLC increased its stake in Rackspace Hosting by 10.3% in the second quarter. Advisory Services Network LLC now owns 5,361 shares of the hosting company’s stock worth $112,000 after buying an additional 500 shares in the last quarter. LS Investment Advisors LLC boosted its stake in shares of Rackspace Hosting by 66.2% in the second quarter. LS Investment Advisors LLC now owns 6,426 shares of the hosting company’s stock valued at $134,000 after buying an additional 2,559 shares during the last quarter. Advisors Asset Management Inc. boosted its stake in shares of Rackspace Hosting by 20.3% in the second quarter. Advisors Asset Management Inc. now owns 6,553 shares of the hosting company’s stock valued at $137,000 after buying an additional 1,107 shares during the last quarter. Pacer Advisors Inc. bought a new stake in shares of Rackspace Hosting during the second quarter valued at $148,000. Finally, Creative Planning boosted its stake in shares of Rackspace Hosting by 24.4% in the second quarter. Creative Planning now owns 9,530 shares of the hosting company’s stock valued at $199,000 after buying an additional 1,870 shares during the last quarter. Institutional investors own 83.62% of the company’s stock.
Rackspace Hosting Company Profile
Rackspace Hosting, Inc (Rackspace) operates in the managed cloud segment of the business information technology (IT) market. The Company offers a portfolio of integrated IT solutions for common business needs. The Company offers services for certain applications, including e-commerce and Web content management sites, business-productivity applications, such as e-mail and collaboration, and data stores.
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