Wednesday, February 16, 2011

Sierra Wireless, Inc. (NASDAQ:SWIR, TSE:SW) Q1 2011 Target Price

Recent price: 10.96$
P/E Ratio: -
3 Months Target Price: 15$

Company Description
Sierra Wireless, Inc. (Sierra Wireless) provides wireless wide solutions for the mobile computing and machine-to-machine (M2M) markets. The Company develops and markets a range of products that include wireless modems for mobile computers, embedded modules and software for original equipment manufacturers (OEMs), intelligent wireless gateway solutions for industrial, commercial and public safety applications and a platform for delivering device management and end-to-end application services. Sierra Wireless also offers professional services to OEM customers during their product development and launch process in wireless design, software, integration and certification to provide built-in wireless connectivity for mobile computing devices and M2M solutions. Its products, services and solutions connect people, their mobile computers and machines to wireless voice and mobile broadband networks around the world.

Confidence Margins
Strong resistance $16.50 (+51%)
Light resistance $15.52 (+42%)
Light support $10.78 (-2%)
Strong support $10.25 (-6%)

Sierra Wireless gave a very poor guidance to analysts and the investment community in general. What can be notice is that the company has already suffered much of the downside it could handle, assuming the company performs at least in the range of the guidance provided by the management, there should be a slow and gradual raise in the stock price that will yield good results for investors.

Entry strategy
For the cautious investor:
Buy the stock for 12$ or less.

For the risk-taking trader:
The June 2011 12$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 80$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 15$, or keep it until 16.50$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour, the supports are very close to one another and if the stock breaks through them, this could be devastating. The second support should be seen as an exit point.

For the risk-taking trader:
The contracts should be kept until the underlying reaches 15$. This should provide a very interesting return if the underlying reaches the target price as the contracts will get in the money.

No comments:

Post a Comment