Thursday, February 17, 2011

XenoPort, Inc. (NASDAQ:XNPT) Q1 2011 Price Target

Recent price: 7.40$
P/E Ratio: -
3 Months Target Price: 9.50$

Company Description
XenoPort, Inc. is a biopharmaceutical company focused on developing a portfolio of internally discovered product candidates that utilize the body’s natural nutrient transport mechanisms to improve the therapeutic benefits of existing drugs. 

XenoPort is developing its lead product candidate in collaboration with Astellas Pharma Inc. and GlaxoSmithKline. XenoPort’s product candidates are being studied for the potential treatment of restless legs syndrome, gastroesophageal reflux disease, neuropathic pain, spasticity and Parkinson’s disease.

Confidence Margins
Strong resistance $11.82 (+60%)
Light resistance $9.68 (+31%)
Light support $7.13 (-4%)
Strong support $5.66 (-24%)

This company has seen quite some ups and downs in it's stock price. But the recent slump coming into the release of it's fourth quarter and year0end statements has had no particular reason. This leads us to think that XenoPort Inc. is undervalued from a technical standpoint. 

Entry strategy
For the cautious investor:
Buy the stock for 8$ or less.

For the risk-taking trader:
The June 2011 8$ 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 9.50$, or keep it until 11$ if you are more bullish in your own analysis. Look forward to sell the stock if it goes under the light support.

For the risk-taking trader:
The contracts should be kept until the underlying reaches 9.55$. 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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