Ah Q3... lots of opportunities for short-term speculation. Here are my long plays today:
* DNA. Consensus estimates for Genentech are only $0.53 per share! They came in at 52 cents per share last quarter. This estimate is quite conservative. I think strong sales of Aventis (for off-label uses) should provide considerable revenue growth and an upside surprise here. I am playing this with October calls struck at 85 (at-the-money). I may exercise and turn this into a position if things go nicely this afternoon as I do not have a biotech/pharma play at the moment.
* INFY. Infosys is the leader in Indian IT outsourcing. Infosys was able to push through a significant price increase this quarter. I don't think analyst estimates are factoring this in. The consensus estimate is only $0.32 per share. Since they reported $0.31 per share last quarter, these estimates are also extremely conservative. I don't think they are factoring in the secular trend towards helpdesk/IT outsourcing or the price increases. Both of these things should solidly impact the bottom line and provide us a nice upside surprise. Unlike Genentech, I am strongly exposed to tech here and this will not become a long term position for me.