THE ARORA REPORT
HIGHER REWARDS, LOWER RISKS

No Verbosity,
Just Clear Actionable Information
ZYX BUY CHANGE ALERT
 March 24, 2011  Issue: YIIIZYXXIIIZYXIZ307
ON OUR RADAR ALERTS
All subscribers receive All Around Alerts, Quick Alerts and On Our Radar Alerts. Stocks included in  On Our Radar Alerts do not satisfy all six screens of the ZYX Change Method, but satisfy at least four screens.  Stocks included here are suitable for those investors and traders wanting more opportunities and are willing to take more risk than inherent in Quick Alerts and All Around Alerts. Unlike stocks included in the All Around Alerts and Quick Alerts, the stocks in On Our Radar Alerts are not tracked from entry to exit.
RED HAT (RHT) : GREAT EARNINGS

Shares of Linux distributor Red Hat  are up 10% in the pre market   after Q4 revenue and earnings that topped analysts’ estimates. Revenue in the three months ended February 28th rose 25%, year over year, to $245 million, earnings rose to 26 cents. Analysts consensus has been revenue of $236 million and earnings of 22 cents. CEO Jim Whitehurst said the company is on track to make $1 billion in revenue next fiscal year. The consensus is $1.03 billion in revenue for fiscal 2012. Charlie Peters, the CFO, said Red Hat’s billings rose at a rate of more than 30% in the quarter, the fastest rate in three years. Red Hat ended the quarter with $1.2 billion in cash

Based on accelerating business trends (billings +31% YoY) and longer-term prospects, driven by factors including JBoss, which has significant  potential and cloud architectures which should help shift market share from Windows, the stock meets four of the six screens of the ZYX Change Method. Risk is higher when all six screens of the ZYX Change Method are not met.

As the chart shows, the best way  to trade is to buy on a pullback. Please be aware that JP Morgan has issued a sell on this stock, but JP Morgan has been a bear on the stock for a while and they have been wrong.

When and if the stock meets all six screens of the ZYX Change Method, we will inform you in real time.
 
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