Charting the course.

• Author: Edgerton, Bobby
• Position: NCtrend

* Company: Red Hat Inc.

Ticker: RHT

Headquarters: Raleigh

Price July 8: $54.48

Trending (previous year): 13.2%

52-week range: $41.89-S61.45

WHY BUY Because it's my favorite North Carolina company. I know we shouldn't have favorites, but Red Hat, which provides open-source software products, had cash flow of more than $500 million last year. Its balance sheet boasts $1.5 billion in cash and zero long-term debt. Revenue has increased nearly eightfold in a decade to $1.5 billion. T. Rowe Price Group Inc. and four other investment companies own 45% of its stock. Another positive: It has no defined-benefit retirement plan.

SUBSCRIBE NOW! Don't be afraid of the high P/E ratio--about 60 in July. It's irrelevant. Red Hat is a cash-flow story, as It...