Three Reasons to Like Concur Technologies Inc (CNQR)

01/18/2010 10:14 am EST


Nick Perry

Equity Options Trader, Schaeffer's Investment Research

Concur Technologies Inc (NASDAQ: CNQR) is a provider of on-demand employee spend management services. The shares have gained more than 40% over the last 52 weeks, yet expectations seemed subdued. This presents an interesting contrarian situation.

A look over the sentiment profile shows three interesting points:

  1. Only six of 26 analysts (23%) rank the stock with a “Buy” rating
  2. 11% of the stock's float is sold short
  3. Open interest is light

One of the tenets of our contrarian methodology is that the implications of skepticism are the most powerful when they come amid strength. Here, we see analysts on the sidelines, which offers the potential for upgrades and a heavy level of short interest, which offers potential buying demand. The graph below shows that we may already be seeing a situation where short sellers are covering.

Light open interest isn't a sign of skepticism, but I do like that here because it suggests this is still somewhat of unknown entity. Or, said another way, this isn't a situation that is already top heavy with speculation.

Click to Enlarge

The company's Web site doesn't show any upcoming events, but based on the past reports, it looks like earnings should be out in the next few weeks, so keep an eye out for that release.

By Nick Perry of Schaeffer’s Trading Floor Blog

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