Thursday, January 11, 2007

Short Update

I went short a small amount of Sapient (SAPE) at 6.64 following their post-earnings jump. It's a dangerous short, so I'll be careful. And, it's a small position anyhow.

Here are some comments from some investment firms:

Thomas Weisel - Feel that the earnings results and the overall revenue trend and momentum were positive. There was some caution expressed regarding the company's higher expenses. They believe Europe will continue to improve and that SAPE should start seeing the ramping up of a major client. Sees economic cycle being a factor, which could really hurt them if there's a turn before SAPE fixes their operational issues.

Friedman Billings Ramsey - Reiterates Market Perform rating with $6 price target. They cite the ongoing stock option investigation as a weight on shares. They feel that European operations are stabilizing, but are still cautious.

RBC Capital - Firm remains cautious on shares of SAPE. They say that the program to improve margins is behind schedule, and they are unsure of the cash impact from the upcoming earnings restatements. They also cite high turnover rate as an area of concern.

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