QSII Puts
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QSII Puts Sharon, You had mentioned that you had placed some QSII Oct $17.50 puts during a recent COOL Club session, so we are tracking them on our COOL Club homepage. I just looked and they are doing well. I'm personally curious how you picked those puts to sell. I've been following QSII pretty closely lately and, fundamentally, I wouldn't have chosen to want to take a chance on owning more of it. $17.50 wouldn't have seemed far enough out of the money for me. Apparently you saw something different and, at the moment, it looks like you were right. If you want to share, I'd be really interested in perhaps gaining some further insight through understanding what your thoughts were. Hope I haven't put you on the spot but thanks in advance for anything you'd be interested in sharing. Laurie Frederiksen Invest with your friends! www.bivio.com Become our Facebook friend! www.facebook.com/bivio Follow us on twitter! www.twitter.com/bivio Laurie, Cool Dudes, and Cool Dudettes, A friend's interest in QSII triggered my interest. So, I did some analysis. I agree with my friend that the company's proxy fight appears to be over and there is considerable room for price recovery.
Further thoughts with respect to why I sold QSII October $17.50 puts:
You may be interested in this article, which was written after I sold the put contract: Quality Systems is still a buy at current levels
At this point, I will probably let these options expire worthless. I could try to buy them back for a nickel, but I am hard-pressed to spend money to close a position that I would not mind at all to be filled. QSII's price will need to fall more than 7.5% by next week Friday in order for the stock to be put to me. And, although the price drop could happen, I see it as a low probability.
Sharon On Tue, Oct 9, 2012 at 10:41 AM, Laurie Frederiksen <laurie@bivio.biz> wrote: Sharon, Thanks Sharon. I think it is really interesting to hear your thought process. I appreciate you taking the time to share it. I think QSII is a hard one. They just lost a big contract and it is difficult to see what that will really mean to them. At least in the short term. I found the article you referenced very interesting. It looks like there is still huge growth potential in the business area they participate in. That has to be good for them as one of the established players. I just hope that they are established enough that they survive and thrive through what I would think will be an inevitable standardization of systems. I'm not ready to give up on them completely at this level. I think their next earnings report will be very interesting. I wonder if there will be interesting Implied volatility changes going on around their options as we get closer. Laurie Frederiksen I still own QSII and have not given up on them. I see the contract loss must have been a wake up call to QSII management. It will be interesting to see their response and I have seen littel to address this by QSII. One thing the proxy fight surfaced (at least to me) was the view by the dissident director that QSII did not have a suitable product answer for the cloud computing environment to offer their customers. With few doubting the shift from client server to cloud will happen I can not imagine QSII not soon coming up with some sort of answer for the cloud computing environment. If they are able to do this I think they can make a comeback. Only time will tell for sure. I tend to see the inside of a lot of doctor's offices and hospitals. My observation is that most including QSII do not have the capability to easily communicate between the various systems. This was supposed to happen as a condition of the government providing huge cash incentives to digitize patient records but does not yet seem to have happened. In my view this will take open systems with standard interfaces as opposed to many offerings with proprietary offerings. Dan On 10/10/2012 4:54 PM, Laurie Frederiksen wrote: > Thanks Sharon. I think it is really interesting to hear your thought process. I appreciate you taking the time to share it. > > I think QSII is a hard one. They just lost a big contract and it is difficult to see what that will really mean to them. At least in the short term. > > I found the article you referenced very interesting. It looks like there is still huge growth potential in the business area they participate in. That has to be good for them as one of the established players. I just hope that they are established enough that they survive and thrive through what I would think will be an inevitable standardization of systems. > > I'm not ready to give up on them completely at this level. I think their next earnings report will be very interesting. > > I wonder if there will be interesting Implied volatility changes going on around their options as we get closer. > > > > Laurie Frederiksen > |
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