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Establishing a position in Riverbed Technology

Posted Apr 24th 2009 3:20PM by Todd HarrisonTodd Harrison RSS Feed
Filed under: Earnings reports, Stocks to Buy, Earnings transcripts

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This post was written by Minyanville contributor Smita Sadana


I have established a small trading position in Riverbed Technology (NASDAQ: RVBD), after it announced earnings. Here's why:
  • Earnings beat expectations. RVBD reported EPS of 13 cents vs. consensus of 10 cents. The revenue number was also higher.

  • Several brokers have enthusiastically raised their targets for RVBD. Lazard Capital raised the price target from $14 to $17, and Wedbush and William Blair upgraded the stock.

  • The percentage of float shorted was 21% at the beginning of April. This stands out as the most interesting piece of data for a trader like me. Given the ignition provided by the good earnings announcement, wouldn't the shorts rush to cover?

If that happens, the initial price target would be around $18.5. I would prefer if the stock came in a little bit but given that short-sellers might be hovering at every level, the stock might not erode today's 15% gains by much, at least, in the very short term.


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Tags: earning, rvbd, tech

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Last updated: November 22, 2009: 10:48 AM

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