This company has actually done a pretty good job executing recently and probably had a decent holiday season. It is quite possible that the company did well enough that it can upside the quarter and talk optimistically. If that were to occur, you should expect a nice rally considering the amount of short interest in the name.
No doubt the company has strong revenue growth, but it hasn't really pushed that down to the income line as much as you might expect. The company only has operating margins in the 6% range. That is up, however, from about 5.5% last year. Look for any color around how management is managing the cost side of the business.
The momentum trader in me says own it into the quarter, but given that we could be on the verge of consumer slowdown heading into the weaker seasonal quarters, I can't bring myself to pay up for it for right here.
Internet YHOO Preview: Almost a Value Play 1/29/2008 12:24 PM EST The Street expects earnings of 11 cents per share on revenue of $1.41 billion for the December quarter.
Internet ETFC: Two Sides to the Story 1/25/2008 3:39 PM EST The Street is negative on the company's earnings, but there were quite a few positive metrics reported.
At the time of publication, Thomas had no positions in the stocks mentioned, although holdings can change at any time without notice.
Ben Thomas, CFA, is the founder and managing principal of Waycross Partners. Waycross Partners is a long/short hedge fund that focuses on the technology and health care sectors. Before Waycross, Ben was a portfolio manager and senior equity analyst at INVESCO, where he was part of a team that managed over $20 billion in assets. While at INVESCO, he was the lead manager for the INVESCO Midcap Growth fund as well as the firm?s senior equity analyst covering technology stocks.
Prior to INVESCO, Ben worked for Banc One Securities and Prudential Securities. He graduated from the University of Kentucky with a bachelor?s degree in finance and went on to earn his MBA from Indiana University. Ben is a member of the CFA Institute and serves on the board of directors for the CFA Society of Louisville.
RSS FEEDS
PODCASTS
