NUAN & ATW Hit big

NUAN rose ~20% today.
1. Cosmo Jim Cramer bashed NUAN recently. Ha ha, Jimbo. You are a hack and everyday you prove it. On 1/16 he said "SELL, SELL. SELL. Say no to speech recognition " And on 12/21/06: " Under no circumstances buy NUAN"
2. Don't sell yet!
* Underlying strength. NUAN held their number in after hours, which makes me reluctant to sell immediately. Moreover, they did not hit their 52 week high.
* Massive short position needing to be covered. Some 26M shares are short. That's 16% of the total shares outstanding BUT 32% of shares available to trade: 50% of NUAN shares are held by insiders. With 10 days before options expiration, this is upwards price pressure.
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ATW released earnings and hit the target
* Earnings up 200% but missed expectations by $0.01 ($0.67 vs $0.68)
* Sales up ~60% and just beat expectations by 1%
(Curiously, Reuters has consensus EPS expectations of $0.71 and Thomson Financial and Yahoo has $0.68.)

Now, there seems to be confusion on Yahoo, Thomson Financial and in the news about the Q4 2005 earnings (the basis for measuring growth). Yahoo and Earnings.com says earnings were $0.22 last year Q4 and TF says $0.47. That's a big difference. For the record, ATW had $14.5M earnings in Q4 2005 or $0.47. Perhaps the $0.22 is before a special one-time credit.

In Q4 2005 ATW entered a $9M credit which was reversed in Q1 2006. That distorts the Q4 2006 growth.

This is what you should know:
1. Demand for their services is super strong
2. Margins are increasing. I say that based on reversing the $9M credit in 2005.