Thursday, February 17, 2011

EnerNOC, Inc. (NASDAQ: ENOC) Q1 2011 Price Target

Recent price: 19.30$
P/E Ratio: 38.59
3 Months Target Price: 31$

Company Description
According to their SEC Filings, EnerNOC unlocks the full value of energy management for our utility and commercial, institutional, and industrial (C&I) customers by reducing real-time demand for electricity, increasing energy efficiency, improving energy supply transparency in competitive markets, and mitigating emissions. They accomplish this by delivering world-class energy management applications including DemandSMART™, comprehensive demand response; EfficiencySMART™, data-driven energy efficiency; SupplySMART™, energy price and risk management; and CarbonSMART™, enterprise carbon management. Their Network Operations Center (NOC) continuously supports these applications across thousands of C&I customer sites throughout the world. Working with more than 100 utilities and grid operators globally, they deliver energy, ancillary services, and carbon mitigation resources that provide cost-effective alternatives to investments in traditional power generation, transmission, and distribution.

Confidence Margins
Strong resistance $36.75 (+90%)
Light resistance $31.49 (+63%)
Light support $17.65 (-9%)
Strong support $16.00 (-17%)

This company has seen it's share of drama over the last weeks. First, it has face scrutiny over it's operations and the way it charges it's clients and just a couple of days later, the company releases it's quarterly statements with results that beat analyst's expectations but with a guidance that failed to stop the stock from falling further. This is a great entry point.

Entry strategy
For the cautious investor:
Buy the stock for 21$ or less.

For the risk-taking trader:
The June 2011 20$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 255$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 31$, or keep it until 35$ if you are more bullish in your own analysis. The stock just broke one of it's support at 19.50$, so this position is to be monitored if if goes lower, in that case The light support should be seen as an exit point.

For the risk-taking trader:
The contracts should be kept until the underlying reaches 31$. This should provide a very interesting return if the underlying reaches the target price as the contracts will get in the money.

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