Daily Commentary From Schaeffer's Investment Research Features: Comverse Technology.Business Editors CINCINNATI--(BUSINESS WIRE)--Dec. 1, 2003 Today's Daily Commentary From SIR features: Comverse Technology Comverse Technology, Inc. (Pink Sheets: CMVT) is an American Technology company located in Woodbury, New York, which develops and markets telecommunications software. Founded in 1982, the company focuses on providing services to third party telecommunication service providers. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CMVT CMVT Converse Technology ). Daily Commentaries are market-based reports that provide insight and analysis from a unique and unbiased perspective. For additional information about this report or to have it delivered to you via email everyday click on the following link : http://www.schaeffersresearch.com/addinfo . Checking in on Comverse Technology Ahead of Earnings Comverse Technology is due to step into the earnings confessional this week. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Hoovers, CMVT makes communications systems and software that phone companies use to offer call answering, voice/fax mail, communications surveillance and recording. This New York-based firm also manufactures digital monitoring systems for call centers. The company will step into the spotlight after the close on December 3. The Street is currently anticipating a loss of two cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. for the third quarter compared to its 13-cent loss for the same period a year ago. The company has an impressive earnings history, as it has surpassed the consensus estimate by an average of 32.50 percent for the past five quarters. Digging into the stock's sentiment backdrop, we find that CMVT is a favorite among traders. The equity's Schaeffer's put/call open interest ratio sits at 0.32, as calls more than triple puts in the front three months of options. This reading is also lower than 97 percent of those taken over the past year. In particular, a significant amount of calls have accumulated at the December 20 strike. This build-up of bullish bets could serve as options-related resistance going forward. Despite the fact that short interest increased by seven percent over the most recent reporting period to 7.1 million shares, it is still less than three times the equity's average daily trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. . This lack of heavy short interest reduces the chances of CMVT enjoying a boost from short sellers as they buy back their positions. Wall Street is even enamored en·am·or tr.v. en·am·ored, en·am·or·ing, en·am·ors To inspire with love; captivate: was enamored of the beautiful dancer; were enamored with the charming island. of the company. According to Zacks, 11 of the 13 analysts following the tech firm rate it a "buy" or better. Any downgrades from this smitten smit·ten v. A past participle of smite. smitten Verb a past participle of smite Adjective deeply affected by love (for) Adj. 1. group could spell trouble for the security. Turning to the stock's performance, it's not surprising that so many have fallen in love with CMVT. The equity has outperformed the Nasdaq Composite The Nasdaq Composite is a stock market index of all of the common stocks and similar securities (e.g. ADRs, tracking stocks, limited partnership interests) listed on the NASDAQ stock market, meaning that it has over 3,000 components. It is highly followed in the U.S. (COMP) since November 2002 as it climbed higher on support from its 10-month moving average. The security has also risen along support at a trendline that connects a series of its higher lows. Click the following link to see the Weekly Relative Strength, CMVT vs. COMP, since November 2002: http://www.schaeffersresearch.com/wire?ID=8979 . Click the following link to see the Daily Chart of CMVT since July 2003: http://www.schaeffersresearch.com/wire?ID=8979 . With optimism riding high, the shares may soon find themselves short on sideline money. A rejection at the 20 level could send the stock down to once again test support at the rising trendline. Traders may just want to be cautious about jumping in ahead of the security's earnings report on Wednesday. |
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