Van Wang, unfortunately I don't know anything other than what has been posted here. I had mentioned that I read a PR where management of Isolyser reportedly stated they expected "...(modest)..." earnings in Q4 but a loss for the year was expected mostly from the extraordinary expenses incurred in the MicroTek merger/acquisition (which I tend to discount as non-reoccurring). It's really hard to say how the market is going to perceive OREX based on Q4/1996 earnings. My hunch is that the stock is going to be relatively stable but with an upward bias. For appropriate risk-adjusted investment allocations, I like OREX at these prices.
I posted that I wrote a bundle (>100) in the money and out of the money calls when OREX recently was at 8-8.25. Believe me, I have no intention of having OREX called away from me at these levels. Chances are I will pocket a few $K either by their worthless expiration or I will repurchase at nominal cost if my 7-1/2s (in the money for which I received 3/4/share - meaning OREX would have to be >8-1/4 at expiry for me to lose more than commissions - could happen but my bet is that it won't) appear threatening, but only at expiry when there is no time premium in the quote. If your horizon is intermediate to long-term and risk tolerance is satisfactory, I would be a buyer here. Conversely, if horizon is for a quick trade, I can only hope that the opportunity presents itself. It may or may not.
I'm not sure what your goals are with OREX, but if not for a quickie trade (understand that I will not turn down a quickie myself if I think the market is overbought, stock gaps up without merit, etc. in which case I might short against the box for a trade by later covering while continuing to hold my original shares), you can mitigate those objectives with options becoming the "quickie" trade while continuing to ride OREX toward much higher, longer-term objectives. No guarantees with any strategy including option-hedging. I'm hoping the market will perceive eps growth rates to justify implied p/e multiple today if 1997 eps of ~.30-.40 is achieved. Should that happen, I think OREX could go north of $10 later this year. Good Luck -Kent |
