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An Oracle Pummeling Could Be Your Opportunity


Its top line missed Street expectations -- but there's a bright side.

What a nasty day it was yesterday. My umbrella blew inside out and broke like a Popsicle stick and I ended up getting soaked. It looked like I just got out of the shower by the time I got to the office.

Asian stocks rose overnight. The Hang Seng and the Nikkei were up 1.71% and 1.68%, respectively. European stocks were in positive territory earlier this morning, too. And here in the US, we're currently trading higher.

Here's what I'm seeing this morning:

"Surprised" is the word that best describes my initial reaction to its first-quarter results.

If you missed it, the company put up $0.30 a share in the period excluding items, which was in line with expectations. I messed up because I was expecting a beat. And making matters worse, its top line missed Street expectations, too.

Some thoughts:

1. I suspect the shares are going to get a swift kick in the pants early in the session, and I don't want to catch any falling knifes. But I'm likely to view any pummeling as more of an opportunity than a major disappointment.

2. The bright side is, it's looking for $0.35 to $0.36 in the second quarter. The Street is at $0.36, which is pretty much right there.

3. As I've pointed out previously, insiders did dip their toes in the water since summer north of $22, which gives me some confidence.

Amerigroup (AGP):
The Virginia-based health insurer released some not-too-peachy news last night. Per a release: "Amerigroup Corporation announced today that it is revising its 2009 annual earnings per diluted share guidance range to $2.55-$2.75 from the previously announced range of $2.90-$3.05. The revised guidance range reflects the Company's current belief that medical costs will be higher in the second-half of the year than previously expected."

Some thoughts:

1. I don't like to see the bar lowered, but it's not the end of the world. I'd note that the Street is at $2.51.

2. It trades at about 9.5 times this year's estimate, which is pretty tempting.

3. Insiders -- how about bellying up in the open market?

4. I'm a bit reluctant to jump into health insurers right now, given the uncertainty surrounding the ongoing health-care debate.
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No positions in stocks mentioned.

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