evisu
I am not a fan of stocks that trade at a 670 P/E, that trades over 12x REVENUE and by their own admission have vastly overstated number of ACTUAL members. They can miss many ways, they have had tremendous growth in new markets and that could ease. There are so many that have been out of work for so long that maybe they can't afford to be members any longer. Maybe they feel that it hasn't worked for them so they stopped using it. Maybe, since the unemployment rate has come down from close to 10% a year ago until now currently at 8.1% that since these people now have jobs they will opt not to pay any longer.
Don't get me wrong this company has tremendous growth but when you start at zero it's easy to say that. Q1 2012 vs Q1 2011 had 140% YOY earnings growth. WOW that's great. BUT 140% growth for a company that trades with a 670 P/E isn't such a bargain. AND, oh yeah, that 140% growth in ER's, $5 million vs $2.1 million! That is outstanding for a company that is valued at almost $11 BILLION!
Now that I said that the real reason I am looking at Puts is twofold:
1. With the stock over $100 I believe that the upside on a beat is around $15. With a miss, I believe that the downside is $20-$30.
2. I think that they will either miss or be in-line and I don't think that in-line will bode well.
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