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…
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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,


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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.

 


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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.

 

 


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Phil's Favorites

The Death Of Retail Is The Birth of Retail - Part 3...A Post Covid World... And More Gamestops?

 

The Death Of Retail Is The Birth of Retail – Part 3…A Post Covid World… And More Gamestops?

Courtesy of Howard Lindzon

Back in 2016 I wrote my first ‘Death of Retail Is The Birth of Retail‘ post and it had some good links and thoughts. I concluded to stay long $aapl, $amzn, $shop and $pypl. That was a good idea and I still own Apple, Amazon and Shopify, but I sold Paypal too early last year.

...



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ValueWalk

A Mixed Bag Of Mega-Cap Financial Firms' Earnings

By Gorilla Trades. Originally published at ValueWalk.

Commenting on the earnings of mega-cap financial firms and today’s trading Gorilla Trades strategist Ken Berman said:

Q4 2020 hedge fund letters, conferences and more

Investors Remain Eager To Buy The Dip

Following Friday’s deterioration, today’s bounce in stocks was crucial from a short-term perspective. With the busy political and earnings calendars in mind, today’s relatively low-volume rally might prove temporary, but it once again confirmed that investors remain eager to buy the dip thanks to the bullish long-term outlook.

The main sectors continued to diverge substantially today, with especially the after...



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Zero Hedge

Options Positioning Collapse Sparks "Potential For High Volatility"

Courtesy of ZeroHedge View original post here.

As we detailed last week, Friday's very large options expiration sparked a ~50% reduction in single stock gamma, leaving markets vulnerable to short-term volatility.

As SpotGamma warned, the  markets were entering a period with the potential for high volatility:

This creates volatility because as large options positions expired, are closed and...



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Politics

What is the 'boogaloo' and who are the rioters who stormed the Capitol? 5 essential reads

 

What is the 'boogaloo' and who are the rioters who stormed the Capitol? 5 essential reads

Rioters mass on the U.S. Capitol steps on Jan. 6. Samuel Corum/Getty Images

Courtesy of Jeff Inglis, The Conversation

In the wake of the insurrection on Jan. 6, the U.S. is bracing for the possibility of additional violent demonstrations and potential riots at the U.S. Capitol and state capitol buildings around the nation. W...



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Chart School

Why did selling SP500 volatility trades blow up?

Courtesy of Read the Ticker

Many have made their fortunes selling volatility premium and then losing it, that is because they are running down the lit fuse and not understanding that eventually the strategy blows up.

In the chart below periods marked with A, B, C, D are periods of chasing yield which was so great the selling of option premium became vogue. Yes, this strategy worked for a while and 'this time was different' worked, until it didn't.

Selling volatility work great during period gray A until the cycle ended at red A.
Selling volatility work great during period gray B until the cycle ended at red B.
Selling volatility work great during period gray C until the cycle ended at blue C.
Selling volatility work great during period gray D un...

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Biotech/COVID-19

The simple reason West Virginia leads the nation in vaccinating nursing home residents

 

The simple reason West Virginia leads the nation in vaccinating nursing home residents

By mid-January, only about a quarter of the COVID-19 vaccines distributed for U.S. nursing homes through the federal program had reached people’s arms. Paul Bersebach/MediaNews Group/Orange County Register via Getty Images

Courtesy of Tinglong Dai, Johns Hopkins University School of Nursing

The urgency of vaccinating nursing home residents is evident in the numbers. The COVID-19 pandemic has claimed the lives of mo...



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Kimble Charting Solutions

Treasury Bond Yields At Make-Or-Break Decision Point Says Joe Friday

Courtesy of Chris Kimble

Treasury bond yields (and interest rates) have been falling for so long now that investors have taken it for granted.

But bond yields have been rising for the past several months and perhaps investors should pay attention, especially as we grapple with questions about inflation and the broader economy (and prospects for recovery).

Today we ask Joe Friday to deliver us the facts! Below is a long-term “monthly” chart of the 30 Year US Treasury Bond Yield.

Counter-Trend Rally In Yields Facing Strong Resistance!

As you can see, treasury bond yields have spent much of the past 25 years trading in a falling channel… but the coronavirus crash sent yields...



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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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Digital Currencies

Bitcoin: why the price has exploded - and where it goes from here

 

Bitcoin: why the price has exploded – and where it goes from here

B is for blast-off (but also bubble). 3DJustincase

Courtesy of Andrew Urquhart, University of Reading

Bitcoin achieved a remarkable rise in 2020 in spite of many things that would normally make investors wary, including US-China tensions, Brexit and, of course, an international pandemic. From a year-low on the daily charts of US$4,748 (£3,490) in the middle of March as pandemic fears took hold, bitcoin rose to ju...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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.  

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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...

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About Ilene:

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