Posts Tagged ‘short positions’

Why Amedisys (AMED) will hit $85

Here’s PSW member Tuscadog’s detailed analysis of the company Amedisys (AMED). Tuscadog feels this is one of the few solid opportunities in the stock market, and he suggests a massive short squeeze may be coming due to AMED’s 53% short interest. – Ilene

Amedisys, Inc. provides home health and hospice services to the chronic, co-morbid, and aging American population. Its home health services include skilled nursing and home health aide services; physical, occupational, and speech therapy; and medically oriented social work to eligible individuals who require ongoing care. The company also offers clinically focused programs for chronic conditions and various diseases,… (Yahoo financial, more here.>>)

Why Amedisys (AMED) will hit $85

Courtesy of Tuscadog, member at PSW

Doctor standing outdoors with elderly patient

Feb 23rd may be ‘Judgment Day’ for the AMED short interest.

This is a long posting based on a lot of research and high level interviews I’ve conducted. I’m a private (long term) investor in Amed and I don’t appreciate the way Amed has been ‘jerked around’ by the hedge funds with false rumors and shorting, hence my willingness to share my analysis with small investors. These are my opinions based on my own extensive research, so invest at your own risk. For background on Amed pay particular attention to the 7 articles by Daryl Davis in the ‘Financial Blogs’ section of the Yahoo Finance page for Amed.

UPDATED GUIDANCE WILL BE A NIGHTMARE FOR SHORTS:

Amed will likely release 2009 EPS on Feb 23rd of around $4.90 to $5 and, more importantly, it will give guidance for 2010 based on the status quo on Medicare billing rates for 2010 (i.e. as already issued for 2010 by The Centers for Medicare & Medicaid Services, CMS). Based on the company’s growth rates and CMS’s announced approved rate increase for 2010 (which translates into a 1.8% net increase for 2010 after two flat pricing years) Amed will likely provide 2010 guidance in the $5.60 to $5.70 range.  I believe actual results outcome will likely be higher, in the $5.70 to $5.90 range.

The 15 analysts who cover AMED are likely waiting for Amed’s guidance update and to see if there are any Health-Bill developments. The Suntrust  upgrade Monday to a $70 target is using a pessimistic assumption of a revision to a retroactive 2.5% Medicare billing rate reduction for 2010. Currently, analysts eps forecasts for 2010 include varying degrees of…
continue reading


Tags: , , , ,




Hedge Fund Short Positions: High Operating Leverage the Common Theme

Hedge Fund Short Positions: High Operating Leverage the Common Theme

Courtesy of Market Folly

Upon reading various hedge fund investor letters and conversing with colleagues in the industry, one thing has become quite clear: hedge funds got their asses kicked on the short side of the portfolio in 2009. This is by no means a shocking revelation given that the stock market itself has risen over 70% from the lows back in March 2009. After all, a rising tide seems to lift all boats. While the negative performance of short positions over the past year is a common trend, we want to focus on a theme found in many of their portfolios.

Here’s the common link: many hedge funds have shorted businesses with high operating leverage. Amidst the crisis of the past two years, operating and financial leverage became quite a detriment to various companies. Hedge funds quickly recognized this and shorted shares of companies who would struggle with this burden in an uncertain economic climate. At the time, it was a poignant move. However, markets are often driven by perception (versus reality).

What are we talking about here?

We’re simply pointing out that the high operating leverage that was once seen as a detriment to the companies that hedge funds were/are shorting can now be construed as an attribute. According to the market, the economy is recovering and things are slowly but surely getting better. (More appropriately, the markets have been the beneficiary of massive capital inflows). Regardless, this market rebound re-instills confidence and shifts investor sentiment. And, most importantly, it reverses risk tolerance.

The very companies investors avoided like the plague during the crisis are now catching a bid because investors’ risk tolerance has returned. Many hedge funds missed this swing in perception and bore the brunt of the blow. It doesn’t matter right now if the company could potentially have problems due to their operating leverage. Right now, all that matters is that risk tolerance has returned and risk is ‘in’. This goes back to the age old market debate of perception versus reality.

We can’t tell you how many times we’ve seen hedge funds comment on the ‘mistakes’ they made in 2009. Almost all of their mistakes are on the short side of the portfolio. And while they don’t name specific stocks,


continue reading


Tags: , , , , ,




seen at your local short-biased hedge fund’s trading desk

seen at your local short-biased hedge fund’s trading desk

Courtesy of The Reformed Broker, Joshua M Brown

shorts

Cheer up, It can’t go up forever guys. It never does.

 


Tags: , ,




Important Point

Tim Knight’s take on yesterday’s trading and his bigger picture view:

Important Point

I genuinely try to avoid talking about "crucial junctures" any more frequently than I must, but we’re at one now. Well, perhaps crucial is too strong a word, but I think tomorrow is a very important day for the short-term direction of the market. There’s a big retail report coming out before the open, and a number of big firms (including Intel, after hours) are reporting earnings. So the Q2 earnings season will begin in earnest.

Today [yesterday] wasn’t at all a good day for the bears. With the Dow up 185 points (having been down early in the trading day), and the $BKX bank index up over 6.5%, a lot of my short positions took it on the chin. My one really big position, my OIH short, I was able to exit at a decent profit, and I got into a couple of TBT longs that were good for me. But otherwise the day pretty much stunk.

Glancing at the FAZ and SKF below, you can see how July’s nice progression of gains got nuked in one session, and in both cases we’re sitting right on support. I got stopped out of both of these immediately at the opening bell (thank goodness).

0713-faz
0713-skf

The simple fact is that we haven’t had as big an upward move on the /ES since May. If tomorrow is another strong day, it’s probably back to the horrible Waiting Game, as both sides continue to wrangle each other. I had thought we had just about gotten the upper hand on this market, but today puts that scenario at-risk.

 

 


Tags: ,




 
 
 

Phil's Favorites

Mr. Morgan

 

Mr. Morgan

Courtesy of 

The Federal Reserve had a precursor before it became the lender of last resort. It wasn’t an institution or a government department. It was a single, solitary man named J. Pierpont Morgan. Mr. Morgan, he was called in the newspapers, and you didn’t need to go any further – everyone knew to whom you were referring.

Stock market panics were common in the early 1900’s because of the agrarian nature of the economy. Each summer, the local banks that catered to farmers throughout the country began calling their money back from the banks in New York City and Chicago so they could raise enough capital to bring in the h...



more from Ilene

Zero Hedge

Anatomy Of The $2 Trillion COVID-19 Stimulus Bill

Courtesy of Visual Capitalist

The unprecedented response to the COVID-19 pandemic has prioritized keeping people apart to slow the spread of the virus. While measures such as business closures and travel restrictions are effective at fighting a pandemic, they also have a dramatic impact on the economy.

To help right the ship, the Coronavirus Aid, Relief, and Economic Security Act — also known as the CARES Act — was passed by U.S. lawmakers last week with little fanfare. The act became the largest economic stimulus bill in modern history, more than doubling the stimulus act passed in 2009 during the Financial Crisis. ...



more from Tyler

Biotech/COVID-19

The new coronavirus emerged from the global wildlife trade - and may be devastating enough to end it

 

The new coronavirus emerged from the global wildlife trade – and may be devastating enough to end it

Government officers seize civets in a wildlife market in Guangzhou, China to prevent the spread of the SARS disease, Jan. 5, 2004. Dustin Shum/South China Morning Post via Getty Images

Courtesy of George Wittemyer, Colorado State University

COVID-19 is one of countless emerging infectious diseases that are zoonotic, meaning they originate in animals. ...



more from Biotech/COVID-19

Members' Corner

Tinker, Tailor, Mobster, Trump

 

Tinker, Tailor, Mobster, Trump

What happens when a Confidential Informant becomes President?

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

...



more from Our Members

Kimble Charting Solutions

Fear Indicators Creating Huge Bearish Reversal Patterns This Month?

Courtesy of Chris Kimble

Its been a rough month for Stocks and Crude Oil. Could these two indicators be suggesting that a panic in fear has run out of steam?

This 2-pack looks at the fear indicators in the Nasdaq (VXN) and Crude Oil (OVX).

Both were at the highest levels in years back in 2008. Both peaked in 2008, as they created monthly bearish reversal patterns.

Turing the page to March of 2020, the Nasdaq fear index could be double topping at t...



more from Kimble C.S.

Insider Scoop

Strategist Channels His Inner Elsa, Says Apple Investors Need To Let It Go

Courtesy of Benzinga

The "Frozen" character Elsa famously declared it's time to "let it go" when her dark secret has been discovered. Boris Schlossberg of BK Asset Management has a similar message to Apple Inc. (NASDAQ: AAPL) investors.

'Absolutely' No Discretionary Spending

The market is guilty of "utterly underestimating" the ultimate economic impact the ...



http://www.insidercow.com/ more from Insider

Chart School

Big moving Averages and macro investment decisions

Courtesy of Read the Ticker

When price is falling every one wonders where demand will come in.


RTT black screen Tv videos study the simplest measure of price (simple moving average). What has happen before guides us now. 














Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, ...

more from Chart School

Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



more from Bitcoin

The Technical Traders

These Index Charts Will Calm You Down

Courtesy of Technical Traders

I put together this video that will calm you down, because knowing where are within the stock market cycles, and the economy makes all the difference.

This is the worst time to be starting a business that’s for sure. I have talked about this is past videos and events I attended that bear markets are fantastic opportunities if you can retain your capital until late in the bear market cycle. If you can do this, you will find countless opportunities to invest money. From buying businesses, franchises, real estate, equipment, and stocks at a considerable discount that would make today’s prices look ridiculous (which they are).

Take a quick watch of this video because it shows you ...



more from Tech. Traders

ValueWalk

Entrepreneurial activity and business ownership on the rise

By Jacob Wolinsky. Originally published at ValueWalk.

Indicating strong health of entrepreneurship, both entrepreneurial activity and established business ownership in the United States have trended upwards over the past 19 years, according to the 2019/2020 Global Entrepreneurship Monitor Global Report, released March 3rd in Miami at the GEM Annual Meeting.

Q4 2019 hedge fund letters, conferences and more

The Benefit Of Entrepreneurial Activity ...

more from ValueWalk

Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

more from Promotions

Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



more from Lee

Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

more from M.T.M.





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.