Small Cap Business Intelligence Stocks Looking Like a Smart Portfolio Addition: MSTR, BIRT & QLIK

Yesterday, small cap business intelligence stock MicroStrategy Incorporated (NASDAQ: MSTR) surged 18.44% after reporting better-than-expected third quarter earnings – meaning it might be a good idea to take a closer look at it along with small cap peers Actuate Corporation (NASDAQ: BIRT) and Qlik Technologies Inc (NASDAQ: QLIK) to see what they might offer small cap investors. After all, everyone is being inundated with huge amounts of data from multiple sources, but its the following small cap stocks that provide software platforms to help customers try to make sense of it all: 

MicroStrategy Incorporated. Founded in 1989, MicroStrategy Incorporated calls itself a leading worldwide provider of enterprise software platforms that provide the most flexible, powerful, scalable and user-friendly platforms for analytics, mobile, identity and loyalty — either on premises or in the cloud. With operations in 26 countries worldwide, MicroStrategy Incorporated serves millions of business users at nearly 4,000 companies across 20 industries around the world. On Monday after the market closed, MicroStrategy Incorporated reported a 4% revenue increase to $141.9 million, a 6% product license revenue increase $33.8 million and a 4% product support and other services revenue increase to $108.2 million. However and what really blew investors away was the massive expectations beat on net income as the company reported $17.1 million (or $1.52 per share on a diluted basis) verses net income of $4.8 million (or $0.43 per share on a diluted basis). A closer look though reveals the net income boost came from a $12.7 million release of liabilities for unrecognized tax benefits; but even with the tax benefit, MicroStrategy Incorporated still soundly beat earnings expectations for the bottom line. It should also be noted that earlier this month, MicroStrategy Incorporated unveiled its new MicroStrategy Analytics Platform, a comprehensive family of powerful, easy-to-use analytics solutions that is the company's most important new software release in years which it says is the culmination of over two decades of innovation in analytics and business intelligence. On Tuesday, MicroStrategy Incorporated rose 18.44% to $119.17 (MSTR has a 52 week trading range of $82.72 to $120.77 a share) for a market cap of $1.35 billion plus the stock is up 27.4% since the start of the year, up 8.5% over the past year and up 193.7% over the past five years.

Actuate Corporation. The founder and co-leader of the BIRT open source project, which is used by more than 2.5 million developers around the globe and serves as the foundation of Actuate Corporation's commercial offerings, applications built with BIRT and BIRT iHub deliver "more business and consumer insights to more people than all BI companies combined." Actuate Corporation has over 5,000 customers globally in a diverse range of business areas that include financial services, technology and the public sector. Early last August, Actuate Corporation announced a twelve month $40 million share repurchase program thanks to the "continued solid performance associated with Actuate's BIRT and BIRT iHub business, as well as management's confidence in the future of this business." The last time Actuate Corporation reported earnings, it had reported $34.9 million in revenue verses $36.2 million; license revenues of $16.2 million as compared to $15.7 million; and service revenues of $18.7 million verses $20.5 million reported (it should be noted that the fiscal first quarter of 2013 marked the end of the quarterly revenue stream from the Company's June 2010 settlement agreement with Oracle which involved the recognition of $1.3 million in revenues for each quarter from Oracle). Non-GAAP net income came in at $4.4 million verses non-GAAP net income of $6.3 million for the same period last year and the CEO noted:

"Continued solid double digit growth of total BIRT iHub-based business and iHub-based license business provides momentum for Actuate. In addition, we are seeing solid momentum for BIRT Analytics less than a year after its acquisition."

Otherwise, Actuate Corporation is scheduled to report third quarter 2013 financial results on Tuesday, November 5. On Tuesday, Actuate Corporation rose 0.63% to $8.04 (BIRT has a 52 week trading range of $4.97 to $8.23 a share) for a market cap of $385.43 million plus the stock is up 46.2% since the start of the year, up 25.8% over the past year and up 240.7% over the past five years.

Qlik Technologies Inc. Founded in Sweden in 1993, Qlik Technologies is the company behind QlikView, a leading Business Discovery platform that delivers user-driven business intelligence to more than 29,000 customers in 100 countries. Late last week, Qlik Technologies was sinking after third-quarter revenue came in lower than analysts had expected and after the company cut its guidance for full-year revenue and profit. Specifically, Qlik Technologies reported a 21% revenue increase to $104.1 million as license revenue increased 12% to $54.5 million, but there was also a weaker than expected performance in Europe and Asia Pacific. Net income came in at $3 million (or 3 cents per share) - up from $151,000 (or break-even per share) a year earlier. The CEO noted:

"We continued to advance further into the enterprise space as reflected by the increase in large deals that we closed, and our view of the long-term market opportunity is unchanged. However, our continued success in attracting enterprise-level sales opportunities is adding complexity to our overall sales process, which needs to be better aligned with the market dynamics we are experiencing. We are taking action to bring more discipline to the management of our growing pipeline, and we expect these changes to take some time to fully impact our results, which is reflected in our fourth quarter guidance."

Hot Safest Stocks For 2014

However, Pacific Crest pointed out Qlik Technologies' sales in the Americas jumped 35% last quarter and sees strong evidence that its positive thesis on the company remains intact. Moreover, Pacific Crest thinks that the company can be acquired. On Tuesday, Qlik Technologies fell 1.70% to $26.06 (QLIK has a 52 week trading range of $16.71 to $37.56 a share) for a market cap of $2.29 billion plus the stock is up 21.7% since the start of the year, up 39.2% over the past year and up 103.6% over the past five years.

With that in mind, it should also be mentioned that MicroStrategy Incorporated has a trailing P/E of 21.31 and a forward P/E of 58.70; Actuate Corporation has a trailing P/E of 75.14 and a forward P/E of 17.87; and Qlik Technologies has no trailing P/E and a forward P/E of 62.05.

Finally, here is a look at the performance of all three small cap business intelligence stocks:

As you can see from the above chart, all three small cap business intelligence stocks have put in a pretty respectable performance for investors over the long term.