You Can Bring Your Red Hat (RHT) - Cramer
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Stock-picking wunderkind Jim Cramer spoke with Red Hat's (NYSE: RHT) CEO Jim Whithurst on Monday's Mad Money.
Even with a 20 percent surge in Red Hat shares on March 29th following impressive fourth-quarter results, Whithurst believes Wall Street is still getting the company's model wrong. Whithurst noted Red Hat's operations are more profitable than peers and generating gobs of free cash in the process.
Many of Red Hat's customers continue to rely on older versions, Whithurst pointed out. Systems designed for seemingly sophisticated companies like NYSE Euronext (NYSE: NYX) are supposed to last for dozens of years, allowing Red Hat to support the systems and ultimately expand margins.
Though Red Hat likes this support model, Whithurst said managers are also focused on new products. The recent acquisition of Gluster, a streaming media storage platform provider, is a testament to this.
Cramer recommends investors buy Red Hat shares on any pullback.
Despite the tout, Red Hat shares are down 0.3 percent to $60.62 Tuesday morning.
Even with a 20 percent surge in Red Hat shares on March 29th following impressive fourth-quarter results, Whithurst believes Wall Street is still getting the company's model wrong. Whithurst noted Red Hat's operations are more profitable than peers and generating gobs of free cash in the process.
Many of Red Hat's customers continue to rely on older versions, Whithurst pointed out. Systems designed for seemingly sophisticated companies like NYSE Euronext (NYSE: NYX) are supposed to last for dozens of years, allowing Red Hat to support the systems and ultimately expand margins.
Though Red Hat likes this support model, Whithurst said managers are also focused on new products. The recent acquisition of Gluster, a streaming media storage platform provider, is a testament to this.
Cramer recommends investors buy Red Hat shares on any pullback.
Despite the tout, Red Hat shares are down 0.3 percent to $60.62 Tuesday morning.
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