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America's 9th Best CEO Will Give You an Investing Edge

By Brian Stoffel - Apr 1, 2013 at 6:15PM

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Where respect rules, a company can perform exceptionally well.

Once you get the hang of it, it's pretty easy to dissect balance sheets, income, and cash flow statements. This is the first step in getting your feet wet in the investment world.

But it doesn't stop there. If we were to base investing decisions solely on what we read in these statements, that would be akin to picking a significant other based solely on their Facebook profile -- to many, it just doesn't make sense to avoid real-life interaction.

Investigating these "soft" aspects of a company are important for investors. And although we can't capture all of the intangibles of a company in one article, -- a website that collects employee sentiment for companies across the world -- recently came out with a list that could help: the Top CEOs of 2013.

Over the past few days, I've covered CEOs 25 through 10. Today, I'm going to introduce you to the company with the 9th highest-rated CEO, give you some background on the company, and at the end, I'll offer up access to a special free report that covers the biggest names in tech.

Citrix Systems (CTXS 0.12%)
In an interesting twist, both the No. 10 and No. 9 CEOs are both leaders for the cloud computing revolution. Last week, I detailed how Marc Beinoff, CEO of and 10th rated CEO for 2013, was one of the earliest pioneers of cloud computing and Software-as-a-Service, or SaaS.

If the concept of "the cloud" is somewhat foreign to you, don't be embarrassed; when I first heard of the the cloud years ago, I though it had to do with the things floating through the sky. Foolish colleague Alex Planes wrote a great primer on the cloud that's worth reading here

Whereas Salesforce focuses on providing the platform for companies to use the cloud, Citrix provides the technology that helps the cloud to function. Today, we'll be focusing on Citrix CEO Mark Templeton.

Templeton arrived at Citrix in 1995 and has been CEO since 2001. Under his watch, Citrix has been able to grow revenue by a steady 15%, and earnings by 13%, per year.

CTXS Revenue TTM Chart

CTXS Revenue TTM data by YCharts.

Leadership as a differentiator
Citrix certainly goes up against some big competition in an effort to make the cloud faster and more efficient. Cisco and VMware (VMW 3.97%) are in the same industry and have market capitalizations exponentially higher than Citrix.

Cisco itself is worth over $100 billion, and though VMware is a much more modest $34 billion, 80% of the company is owned by EMC (EMC), which sports a market cap of $50 billion. I throw these numbers at you to demonstrate that Citrix, sitting at $13 billion, is far smaller.

However, that doesn't mean the company isn't performing well within its virtualization niche. VMware recently had to hold a strategy day to make it clear it wasn't being taken to school by Citrix. Citrix has been stealing market share from VMware and Citrix's XenDesktop is only half the price of VMware's vSphere. 

Maybe one of the reasons Citrix has performed so well, and Templeton has gotten 95% of his employees to approve of the job he's doing, is because of his leadership style. In an interview with The New York Times, Templeton stated:

You have to make sure you never confuse the hierarchy that you need for managing complexity with the respect that people deserve. Because that's where a lot of organizations go off track, confusing respect and hierarchy, and thinking that low on hierarchy means low respect; high on the hierarchy means high respect. So hierarchy is a necessary evil of managing complexity, but it in no way has anything to do with respect that is owed an individual.

If you say that to everyone over and over and over, it allows people in the company to send me an email no matter what their title might be or to come up to me at any time and point out something -- a great idea or a great problem or to seek advice or whatever.

There's no doubt: culture simply matters.

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Stocks Mentioned

Citrix Systems, Inc. Stock Quote
Citrix Systems, Inc.
$99.64 (0.12%) $0.12
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$183.83 (1.41%) $2.55
Microsoft Corporation Stock Quote
Microsoft Corporation
$262.52 (1.12%) $2.90
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,116.10 (-0.16%) $-3.30
Apple Inc. Stock Quote
Apple Inc.
$140.52 (0.11%) $0.16, Inc. Stock Quote, Inc.
$2,135.50 (2.57%) $53.50
Dell EMC Stock Quote
Dell EMC
Cisco Systems, Inc. Stock Quote
Cisco Systems, Inc.
$44.00 (0.53%) $0.23
VMware, Inc. Stock Quote
VMware, Inc.
$120.54 (3.97%) $4.60, inc. Stock Quote, inc.
$159.65 (1.73%) $2.72

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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