Marketgems Earnings Trader- Trading Strong or Weak Earnings Growth

[jenna]

American Healthways Reports 130% Growth

Still its very dangerous to hold through a report especially in the tech sector. When there is a huge run up into the close, it doesn't even pay to hold much or anything in a tech rally (i.e. COGN) AMHC is just the second earnings play I held long this week only because the preponderance of circumstantial evidence was good (like TTWO and that did well in a morning gap up).

Mostly we don't want to be trading the same 'ole stocks that all daytraders are trading, the mm's know all the stops, the moves and can manipulate the market as they please. That DOES NOT HAPPEN with out special plays. I still use the 'typical' KLAC, BRCM, XLNX and CCMP plays more as filler when a trend is very clear. Once the clarity of the trend blurs, I like to put on my "earnings plays" hat and run for those plays. Since the trend is NEVER clear for long and the preponderant trend now seems to be down, the earnings plays are more important than ever before (although I've said this for 6 years now)

Earnings plays can and usually do sell off after the report (MWD/GS/LEH were no-brainers), but APOL/BMET did not sell off and ironically these were not held although it was suspected they would do well. A good strategy which I have repeated ad nauseum is to check for any upgrades in the stock, a good market open and confirmation by the market internals. Sometimes you don't even need good market internals as an especially strong earnings report will BUCK THE TREND (like COGN this afternoon when naz was down triple digits COGN was soaring to highs of the session from lows of 20.78 to high for the session of 22.63)

First-Quarter Earnings Per Diluted Share to $0.23
Increases Fiscal 2003 Earnings Guidance to $1.02 to $1.06 Per Diluted Share

NASHVILLE, Tenn., Dec 19, 2002 (BUSINESS WIRE) -- Thomas G. Cigarran, Chairman and Chief Executive Officer of American Healthways, Inc. (Nasdaq/NM: AMHC), today announced financial results for the first quarter of fiscal 2003, which ended November 30, 2002. Total revenues for the quarter increased 53%, to $37,538,000 from $24,542,000 for the first quarter of fiscal 2002. Net income rose 148% to $3,699,000 from $1,494,000. Earnings per diluted share for the quarter were $0.23, up 130% from $0.10 for the first quarter of fiscal 2002.