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.

So how does a boring data storage and analytics company manage to embarrass bigger and better-known peers such as Oracle (NAS: ORCL) , EMC (NYS: EMC) , and IBM (NYS: IBM) ?

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 thisarticle 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.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.