Gartner Incorporated (IT), a Connecticut based information technology research company, said its first quarter profit more than doubled. The company communicated that its impressive earnings growth was due largely to greater contract revenue. This is likely to motivate stock trading as the growth is attributed directly to the company’s business operations.
The company said its net income reached $21.5 million, or 21 cents per share, for its quarter, which ended on March 31. During last year’s first quarter, the company netted $8.2 million, or 8 cents per share. This means that the company increased its profit more the double, which definitely emboldens investors maintain Gartner in the trading portfolio as part of a long-term stock trading strategy.
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Company sales were up 10 percent during the quarter at $290.1 million. Last year’s quarterly revenue was $264.2 million. Analysts greatly underestimated the company’s growth. Estimates called for a much smaller profit of 9 cents per share, on sales of $285.1 million. This much better than expected earnings drove stock investing as Gartner was up over 3 percent in early trade following the news.
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The company said information technology research revenue, a primary driver of business, grew 19 percent. Consulting revenue was up a modest two percent. In its full year outlook, the company said it expects earnings of 88 to 98 cents per share. This is more in line with analysts who have called for gains of 94 cents per share for 2008.
If a company’s share price spikes strongly, it is possible covered call investing may be a good strategy as covered call strategies can be put into play to provide potential income and also provide downside protection. Another reason these stock trading strategies may become more enticing is that the one year price target for the stock is $24. It currently trades just above that mark. This does not guarantee the stock cannot move up more over that time, but it may make investors more cautious about diving in.
Gartner has long been recognized as leader in industry research reports that it provides to companies and organizations. Technology companies regularly rely on outsourced research to help keep in touch with industry trends, product development, competition, and other items relative to their companies.
Investors seem to be holding steady immediately following the announcement, as the less than $1 trading range on the day offers limited implied volatility. Over the last 52 weeks, the company has traded between $15 and $28. The fact that the company currently trades near its 52-week high may keep some conservative stock research gurus from including Gartner in their long term stock picks.
As the US economy picks up steam, companies are going to be looking more and more for a competitive advantage. The IT sector is especially competitive so companies in that industry are likely to demand more premium information from companies like Gartner.
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[tags] US, IT, Gartner Inc., covered call investing, covered call strategies, implied volatility, investing in stock options, long term stock picks, poweroptions, stock investing, stock market help, stock market investment strategies, stock options, stock research, stock trading [/tags]