How to Beat the Market with Moat-Building 101
When the whole market went to Greece in a handbasket on Thursday, data analytics specialist Teradata (NYS: TDC) went the other way. The stock jumped as much as 7.3% thanks to another terrific earnings report, and Teradata was beating the S&P 500 by 8.7% for a while.
The enthusiasm faded as the day wore on, but Teradata shares stayed much stronger than the overall market. In a nutshell, that's a microcosm of how Teradata treats the market over longer time scales, too.
It's actually pretty simple. Teradata happens to specialize in big-ticket data handling that can bring even heavy-duty analytics packages to their knees. As the world keeps saturating with real-world information packets that beg to be collected and then scraped down for business advantages, this is where the really big boys go for extra help.
Apple (NAS: AAPL) may have reportedly reached out to EMC division Isilon to build a 12-petabyte storage space for the video side of iTunes -- but that's just a simple storage job. If you need to analyze petabytes of data, Teradata is often the obvious choice. One petabyte is a cool million gigabytes, so these are big jobs.
Last winter, for example, the company stole the Wal-Mart (NYS: WMT) account from right under tech titan Hewlett-Packard's (NYS: HPQ) nose. Though HP denies it, Walmart is said to be displeased with its Neoview analytics package and went back to longtime partner Teradata instead.
That's how Teradata managed to post 24% higher revenues in the second quarter, compared with the year-ago period. Non-GAAP earnings jumped 30% to $0.60 per share. Over the last two quarters, Teradata has doubled the number of petabyte-sized customer accounts, of which Wal-Mart is reportedly the second largest.
So that's how Teradata beats the market on a bad day or a tough year. It's all about business moats and competitive strength, which translates directly into strong results. To get a deeper look at what makes Teradata tick, we've prepared a special report for you. Modestly titled, The Only Stock You Need to Profit From the NEW Technology Revolution tells you everything you need to know about Big Data and large-scale analytics. Click here to grab your copy right now -- it's entirely free!
At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Motley Fool owns shares of EMC, Wal-Mart, Oracle, IBM, and Apple.Motley Fool newsletter serviceshave recommended buying shares of Wal-Mart, Teradata, and Apple.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple.Motley Fool newsletter serviceshave recommended creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. You can check outAnders' holdings and a concise bio, follow him onTwitterorGoogle+, or peruseour Foolish disclosure policy.
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