Tuesday, December 19, 2006

Earnings Gamble

It's that time again... time to throw a small bet on the table. Picked up some shares of Palm (PALM) at 13.60. Sentiment has been remarkably negative, and it is trading at a 52-week low. Definitely catching a falling knife here. Some people like me will never learn.

And, thinking about what I said about Harrah's (HET) last night... I might be wrong in my estimate of where shares would trade should it officially announce the acceptance of a $90 offer. I failed to take into account the $1.60 in dividends that it would be paying out in the next year. Then again, it could choose not to pay it out, but I think that's unlikely.


gaamblor said...

Doesn't look good...Treo is so popular I'm always suprised that they can't make any money from its success

Brute Force said...

Numbers came in roughly in-line. They guided revs to 390-395MM when they pre-announced an earnings shortfall about a month ago. Earns were guided to 0.15-0.16 ex-options.

Trading up just a touch right now in the AH market. I guess the CC could still swing it up or down.

Ya, I agree with your view on the Treo. Surprises me as well that they can't make things work.

gaamblor said...

oh i didn't realize the .15 was ex-options...who cares what ex options is thats like reporting ex salaries or ex lighting bills

Never-Limp said...

Yeah, ex-options = ex-bonuses

Brute Force said...

Definitely agree with both of you that ignoring options is suspect, if not entirely incorrect. When they lowered their forecast back in November, they laid out their numbers in ex-options terms, and so that's pretty much how they would need to be compared.

In any case, I'll be exiting this tomorrow for gain or loss. It was a gamble with a hint of educated guessing, not much more to it.