Editors Note:

Picking a new stock after the biggest rally in four months is not an easy task. With the Dow up more than 300 points, S&P over 32 and Nasdaq over 78 points, every stock worth owning has gapped higher and inflated the option premiums. The stocks that did not gap higher today we do not want to own for obvious reasons. If they are not moving higher in today's market they are probably not going to be winners as this short squeeze bleeds off. I went with AZPN because of its steady trend and lack of material volatility. It has risen steadily even when the Nasdaq was weak in late February. Options are cheap so we have little risk if the market rolls over.


AZPN - Aspen Technology - Company Profile

Aspen Technology, Inc., together with its subsidiaries, provides software and services to the process industries in the United States, Europe, and internationally. It operates through two segments, Subscription and Software, and Services. The company licenses integrated process optimization software solutions and associated support services designed to manage and optimize plant and process design, operational performance, and supply chain planning. Its software suites include aspenONE Engineering, and aspenONE Manufacturing and Supply Chain, which are integrated applications that allow end users to design process manufacturing environments, forecast and simulate potential actions, monitor operational performance, and manage planning and scheduling activities, as well as collaborate across these functions and activities. The company also provides software maintenance and support, professional, and training services. Its customers consist of companies, which are engaged in process industries, such as energy, chemicals, engineering, and construction, as well as consumer packaged goods, power, metals and mining, pulp and paper, pharmaceuticals, and biofuels. Aspen Technology, Inc. was founded in 1981 and is headquartered in Bedford, Massachusetts. Company description from FinViz.com.

Aspen reported Q4 earnings of 52 cents on revenue of $119.9 million. Estimates were for 43 cents and $117.6 million. Annualized revenue rose 4.5% to $450 million at the end of the quarter. Operating margins were 50.8%. The company repurchased 1.3 million shares in the quarter for $70 million. They ended the quarter with $140 million in cash and generated $27 million in free cash flow.

Earnings April 27th.

They are a small but growing company that provides software for manufactures to optimize plant operations. They acquired a new product in the quarter called Mtell, which offers machine learning based technology.

Shares have doubled over the last 12 months and they closed at a new high on Wednesday.

Buy Apr $60 call, currently $1.60, initial stop loss $57.50.


No New Bearish Plays