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USIX rises on upgrades, ASP outlook

Shares of USinternetworking (Nasdaq: USIX) rose more than 20 percent Thursday after two upgrades boosted the player in the booming market for Application Service Providers, or ASP.

Shares were up 3 59/64 to 32 11/64 Thursday morning. USinternetworking installs and manages software applications in its data centers and enables its customers to use these applications over the Internet for a fixed monthly fee.

Volpe Brown Whelan initiated the stock with a "buy" rating. Analyst David Sturz called USinternetworking a leader in the ASP market.

"They were first to the public market, and have very robust networking to deliver their services," Sturz said. He also cited the company's blue-chip partnerships with companies such as Microsoft, Siebel Systems and PeopleSoft as reasons for his rating.

Wasserstein Perella Securities, Inc. also initiated coverage on the ASP industry, and touted USinternetworking as a strong player in the field. The firm started USinternetworking with a "strong buy" and a 12-month price target of $45

USinternetworking is a pioneer and a leading provider in the ASP market - which is poised to grow exponentially, Wasserstein Perella said in a release. E-commerce, Web-based applications and the increasing trend to outsource are all engines to ASP market growth, it added.

This September, Robinson Humphrey also started the stock at "strong market perform/long term buy," and CE Unterberg Towbin started it at "buy."