A forecasted weak second quarter sent the stock of utility software vendor VERITAS Software (NASDAQ:VRTS) down more than 35% on July 6. The stock, recovering modestly from July levels, is up 5% today with news that the company has been recognized as "best in class" by the readers of Windows IT Pro Magazine.

The recognition -- for the company's data protection, replication, storage management, and high-availability products -- was the impetus this writer needed to take a second look at this fallen angel.

The company is rich in cash. With debt of $900 million and cash of $2.75 billion, it has the money to grow organically, make acquisitions, and/or start paying a dividend.

The company just used $225 million of that cash to acquire KVault Software -- the worldwide leader in e-mail archiving software. According to information technology research and analysis company Gartner (NYSE:IT), KVault is the leader in a market expected to grow at a 57% compounded annual growth rate through 2007. Better yet, the acquisition is expected to add to earnings within 12 to 18 months.

To help reignite growth, VERITAS has reorganized and taken the initiative to find solutions for clients even if they are not homegrown. Judging from available research, the need for the company's products is still open for strong growth.

Remember that second-quarter forecast that torpedoed the stock? Revenue grew 22% and generally accepted accounting principles net income almost doubled. What spooked investors was weakness late in the quarter in U.S. orders. Note, though, that the company is still expecting continued growth this year and announced a $500 million share repurchase program. Those actions telegraph that it expects better times ahead.

Note too that VERITAS has strong 26% operating margins. Compared with the 12% at EMC (NYSE:EMC), 13% at Computer Associates (NYSE:CA), and 10% at IBM (NYSE:IBM), how worried can you get?

VERITAS is down 45% from where it was 52 weeks ago and is trading near its 52-week low. Although the cash-flow-positive company is strongly affected by corporate IT spending, the stock has been discounted to a level where this industry leader is trading at an attractive price.

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Fool contributor and IT consultant W.D. Crotty does not own stock in any of the companies mentioned.