Small Cap Stocks See Significant Opportunities in ‘Cloud Computing’

You may know that the term “cloud” as a synonym for the Internet is based on the use of a cloud as the symbol representing the Internet in flowcharts and diagrams. Services that are hosted on the “cloud” are hosted over the Internet.

In general, hosted services over the “cloud” come in three service categories: Infrastructure, Platform and Software .

Graphic courtesy of yokotechspace.blogspot.com

A cloud service has characteristics that differentiate it from traditional hosting: it is sold on demand at a given time and the service is fully managed by the provider (the consumer only needs a personal computer and Internet access). A cloud can be kept private for a select group of users or made public for as many users as possible like Amazon (Nasdaq: AMZN) Web Services, http://aws.amazon.com/.

Cloud computing is at an early stage, with a fragmented group of providers large and small delivering a slew of cloud-based services, from full-blown applications to storage services to spam filtering. As companies and consumers take advantage of cloud computing technology, there will be significant growth opportunities for data center hardware and services along with demand for virtual services and storage solutions.

So let’s take a look at some small cap companies involved in cloud computing.

Chanhassen, MN-based Datalink Corp. (Nasdaq: DTLK, http://www.datalink.com) provides data center solutions and services to mid- and large-size companies in the United States. It engages in designing and supporting infrastructures, such as servers, storage, and networks.  DTLK has a $170 million market cap and trades about 140,000 shares a day. Its 52-week trading range is $6.11-$11.50. It closed June 29 at $9.55, up 31 cents for the day.

Alpharetta, GA-based MedAssets (Nasdaq: MDAS, http://www.medassets.com) provides technology-enabled products and services for hospitals, health systems and other providers  in the US. It operates in two segments, Spend and Clinical Resource Management, and Revenue Cycle Management.  MDAS has a $790 million market cap, trades about 500,000 shares per day and has a 52-week trading range of $8.52-$14.58. It closed June 29 at $13.45, up 21 cents for the day.

Chicago-based Accretive Health (NYSE: AH, http://www.accretivehealth.com) provides revenue cycle management services that helps hospitals and healthcare companies manage their revenue cycles, which encompass patient registration, insurance and benefit verification, medical treatment documentation and coding, etc. Its market cap is near $1 billion and trades more than 1 million shares a day. Its 52-week trading range is $7.75-$32.82. AH closed June 29 at $10.96. up 27 cents for the day.

San Diego, CA-based The Active Network (Nasdaq: ACTV, http://www.activenetwork.com) provides organization-based cloud computing applications services to business customers internationally. The company offers ActiveWorks, an organization-based cloud computing platform that transforms the way organizers record, track, manage, and share information regarding activities and events.  ACTV has a market cap of $900 million and, trades about 400,000 shares daily. Its 52 week trading range is $12-$20. It closed June 29 at $15.39, up 43 cents for the day.

San Diego, CA-based CommerceTel Corp. (OTC: MFON, http://www.commercetel.com) develops marketing solutions and platforms for mobile devices. It provides a suite of services and technologies that enables brands, enterprises, marketers, and content owners to communicate with consumers via their mobile phone.  MFON’s market cap is small, only about $13 million and it trades less than 10,000 shares daily.  The 52-week trading range is $0.27-$2. It closed June  29 at $0.59, no change for the day.

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