27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
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athenahealth, Inc (NASDAQ: ATHN) is scheduled to release fourth-quarter and full-year 2014 results after the closing bell on February 5. In the last reported quarter, athenahealth's earnings beat the Zacks Consensus Estimate by a penny, recording a 16.67 percent positive surprise.
Let's see how things are shaping up for this announcement.
Factors at Play
This leading provider of cloud-based services and mobile tools has been witnessing increased adoption of its electronic health record, revenue cycle management and patient engagement services.
Of late, athenahealth has entered into a number of strategic partnerships with the likes of Henry Schein (NASDAQ: HSIC), Granite Healthcare Network and Ingenious Med, which will further boost its offerings and is a key growth catalyst in our view.
athenahealth has implemented a growth strategy across the U.S. through which the company plans to expand its foothold in major health care technology markets by focusing on research and development (R&D) activities and mobile innovation. However, increased R&D spending may hurt its operating margins in the near term.
Meanwhile, athenahealth's quarterly activities have failed to impress analysts. Hence, the Zacks Consensus Estimate for the fourth quarter remained unchanged at 19 cents per share over the last 90 days.
Moreover, in Dec 2014, athenahealth issued the initial 2015 guidance, which we believe is conservative, considering the company's strong product portfolio, growing physician base and unique business model. Consequently, the Zacks Consensus Estimate for 2015 dropped roughly 3% over the last 60 days to currently stand at 34 cents a share.
Earnings WhispersOur proven model does not conclusively show that athenahealth is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here as you will see below:
Earnings ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00% as both these parameters stand at 19 cents.
Zacks Rank: athenahealth's Zacks Rank #3 (Hold) when combined with an ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.Stocks to Consider
Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Healthsouth Corp. (NYSE: HLS) with an Earnings ESP of +3.92% and a Zacks Rank #2 (Buy).
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Intersect ENT (NASDAQ: XENT) with an Earnings ESP of +11.11% and a Zacks Rank #2.
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ATHENAHEALTH IN (NASDAQ: ATHN): Free Stock Analysis Report
HENRY SCHEIN IN (NASDAQ: HSIC): Free Stock Analysis Report
HEALTHSOUTH CP (NYSE: HLS): Free Stock Analysis Report
INTERSECT ENT (NASDAQ: XENT): Free Stock Analysis Report
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Zacks Investment Research
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.