SELLING EARNINGS

I continue to see a lot of "selling earnings" going on, regardless good or bad earnings, which should not be a total surprise, given the run-ups most stocks had in the first quarter. Selling SCSS in front of its earnings turned out to be the right call. The fact is the upside report and guidance are fully discounted, and the valuation is definitely not cheap here. The question is" would you buy this stock here?" Is this a compelling story? The answer for both questions are "NO".

I continue to look trim ALDA in front of its earnings tonight, although I intent to retain a small position. I expect a strong earning report tonight, but not an increase of guidance. I expect the stock will fall a bit after, as it usually does. But this is a much better story because it remains under-covered and less known, hence valuation much reasonable. Sold some ALDA at 33.80 for a 7% gain (since March 6, 06). (p.s. Results are out and they were huge. EPS of 0.76/sh for Q1/06. I hope the market does not notice tomorrow morning, and gives me an opportunity to buyback my shares).

BTUI has fallen by more than 10% since it made its all time high of $22.79. The earnings were actually really good. Strong top line and bottom line growth, strong cash flow, decent backlog, clean balance sheet, management confident, outlook strong. Valuation is more than reasonable and there's no earning risk as it has reported. Investors have made a lot of money on this name over the past year and they are sitting on a lot of profits here and you can't blame them for taking some off the table. The issue is really the direction of the overall market, which has been direction-less for the past few weeks. Having said that, I am considering to open a small position here. Opened a small position at 19.40.