Monday, January 31, 2011

Excel Maritime Carriers Ltd. (NYSE: EXM) Q1 2011 Analysis

Recent price: 4.64$
P/E Ratio: 1.36
3 month Target Price: 6.00$

Company Description
Excel is an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as bauxite, fertilizers and steel products. Excel owns a fleet of 41 vessels, among which one Capesize vessel is through a majority joint venture and, together with seven Panamax vessels under bareboat charters, operates a total of 48 vessels (6 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 5 Handymax vessels) with a total carrying capacity of over 4.0 million DWT. Excel’s Class A common shares have been listed since September 15, 2005 on the New York Stock Exchange (NYSE) under the symbol EXM and, prior to that date, were listed on the American Stock Exchange (AMEX) since 1998.

Confidence Margins
Strong resistance $6.63 (+43%)
Light resistance 5.79 (+25%)
Light support $4.56 (-2%)
Strong support $4.00 (-14%)

As for many Greek shipping companies trading on american stock exchanges, Excel Maritime Carriers Ltd, suffered quite a downturn in the recent months. This company has been the prey of many short sellers as it filed for a $250 million notes offering. This should be seen as a temporary offset since the company is still in a financially acceptable shape. As the stock is close to it's resistance, one should see a buying signal for the upcoming uptrend.

Entry strategy
For the cautious investor:
Buy the stock for 4.80$ or less.

For the risk-taking trader:
The March 2011 5$ call option contract seems to be the right position to take, they can be acquired for about 25$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 6$, or keep it until 6.50$ if the stock crosses the light resistance level. There is little downside potential for this stock but one has to keep cautious in case the stock crosses the light resistance.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 6$, as for the cautious investor.

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