Two Tech Stocks Defy the Recession

For anyone who's grown weary of the bellyaching over the rising price of gasoline and the precarious state of tomatoes, Sybase's (NYSE: SY) second-quarter earnings announcement was a refreshing change of pace. It's odd that a company offering world-class mobile messaging solutions somehow failed to get the message that we're trying to have a recession. Maybe the folks there were too busy adding 707 new mobility customers, stealing market share from Teradata (NYSE: TDC), and improving margins by 300 basis points to notice.

With year-over-year growth in total revenue, cash flow from operations, and GAAP net income of 15%, 16%, and 24%, respectively, investors were hard-pressed to come up with anything to complain about, except maybe management's conservative forward guidance. On that point, though, one almost gets the feeling that the head honchos were just bowing to peer pressure to say something gloomy, so that no one would accuse them of being a Mr. Braggy Pants.

And one more
Also reporting this week was systems management vendor Compuware (Nasdaq: CPWR), which posted year-over-year growth in revenue and cash flow of 7% and 26%, respectively, and a substantial improvement in net income. Management attributed these results to a focused sales and marketing strategy and disciplined expense management, springing from its Compuware 2.0 campaign, a companywide initiative launched during the quarter to accelerate customer and shareholder value. Although one quarter doesn't constitute a trend, especially for a company whose results have been as erratic as Compuware's, fiscal 2009 appears to be off to a solid start.

The companies share something in common: They both offer solutions that help customers increase the return on the investments they have already made in their IT infrastructures. During tough economic times, as customers seek to extract as much value as they can from their resources, companies such as Sybase and Compuware have an opportunity to not just survive, but also thrive. Investors seeking well-financed companies with strong franchises and an unwavering focus on their long-term visions might benefit from a closer look at these two.

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