Thursday, March 31, 2011

The One Good Reason Why David Sokol Is Clean (NYSE: BRK; LZ)



Even if it is widely discussed that the former Berkshire Hathaway (NYSE BRK.A, BRK.B) executive David Sokol acted in an unethical manner in the Lubrizol Corporation (NYSE: LZ) deal, people seem to forget one important matter.


A lot of the buzz is generated by the fact that Sokol took his position after that meeting with investment bankers at Citigroup on December 13th 2010. those who are in such a ruch to throw accusations at Sokol seemed to miss that there were 18 companies proposed to David Sokol on that day.

Even if he acknowledged that Lubrizol was the most interesting company out of that list. There is no way he could have known in advance which of those 18 companies Berkshire Hathaway's Chairman Warren Buffet would come to chose in the end. It is also interesting to note that Buffet was pretty cold about buying Lubrizol until near the end of January 2011.

A way to know that Sokol acted in a way to profit from an acquisition by Berkshire Hathaway would have been for him to buy all of the 18 companies. One must remember that before the acquisition, as he said in an interview on CNBC, David Sokol purchased those Lubrizol stocks for his own account because he thought that the company had a good long term potential. He also mentioned that he trades pretty rarely. That is also the same reason why he was pressing for a deal between Berkshire Hathaway and Lubrizol. He was just acting in the interest of Berkshire Hathaway shareholders according to his duties. 

This all just seems to be a matter of bad timing and probably bad judgement about the perception of those moves from David Sokol if we take into account that his portfolio turnover is dismal on a yearly basis.

On the right is a timeline of the deal between Berkshire Hathaway and Lubrizol from an article provided by the Wall Street Journal.

Tuesday, March 29, 2011

Schweitzer-Mauduit International Inc (NYSE: SWM) Q2 2011 Price Target

Recent price: 48.80$
P/E Ratio: 12.54
3 Months Target Price: 59$

Company Description
Data provided by Reuters tells us that, Schweitzer-Mauduit International, Inc. (SWM) is a multinational diversified producer of specialty papers. SWM manufactures and sells paper and reconstituted tobacco products to the tobacco industry, as well as specialized paper products for use in other applications. The primary products in the group include cigarette, plug wrap and base tipping papers, or Cigarette Papers, used to wrap various parts of a cigarette and reconstituted tobacco leaf (RTL), which is used as a blend with virgin tobacco in cigarettes, reconstituted tobacco wrappers and binders for cigars. These products are sold directly to the tobacco companies or their designated converters in the Americas, Europe and Asia. Non-tobacco products are a diverse mix of products that includes engineered papers, as well as commodity paper grades produced to maximize machine utilization. SWM operates and manages three segments: United States, France and Brazil.


Confidence Margins
Strong resistance $69.33 (+42%)
Light resistance $59.28 (+21%)
Light support $46.75 (-4%)
Strong support $42.62 (-13%)

Recommendation
The company is currently in the mist of a patent war with the Delfort Group since 2010, but it seems that the case is dragging at United States Patent and Trademark Office since they are re-examining U.S. Patent number 6,725,867. This stock has a lot of upside potential due to it's continued earning power.

Entry strategy
For the cautious investor:
Buy the stock for 49.50$ or less. There seems to be two or three days of downside left in the company, after which the company will strive.

For the risk-taking trader:
The June 2011 55$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 145$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 59$, or keep it until 69$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 59$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Best Buy Co. Inc (NYSE: BBY) Q2 2011 Price Target

Recent price: 29.35$
P/E Ratio: 9.41
3 Months Target Price: 35$

Company Description
According to data provided by Reuters, Best Buy Co., Inc., incorporated in 1966, is a multinational retailer of consumer electronics, home office products, entertainment software, appliances and related services. The Company operates retail stores and call centers and conduct online retail operations under a variety of brand names, such as Best Buy (BestBuy.com, BestBuy.ca), The Carphone Warehouse (CarphoneWarehouse.com), Five Star, Future Shop (FutureShop.ca), Geek Squad, Magnolia Audio Video, Napster (Napster.com), Pacific Sales, The Phone House (PhoneHouse.com) and Speakeasy. It operates in two segments: Domestic and International. The Domestic segment is consisted of the operations in all states, districts and territories of the United States, operating under various brand names, including, Best Buy, Best Buy Mobile, Geek Squad, Magnolia Audio Video, Napster, Pacific Sales and Speakeasy. The International segment is consisted of all Canada operations, operating under the brand names Best Buy, Best Buy Mobile, Future Shop and Geek Squad; all Europe operations, operating under the brand names The Carphone Warehouse, The Phone House and Geek Squad; all China operations, operating under the brand names Best Buy, Geek Squad and Five Star; all Mexico operations, operating under the brand names Best Buy and Geek Squad and all Turkey operations, operating under the brand names Best Buy and Geek Squad.


Confidence Margins
Strong resistance $45.63 (+55%)
Light resistance $32.98 (+12%)
Light support $28.65 (-2%)
Strong support $25.00 (-15%)

Recommendation
The company provided a revenue guidance for the year 2011 on march 24th that was better than what analysts were expecting. It is interesting to note that Best Buy Co. Inc is showing incredibly low valuations, the current stock prices assumes that there will be dismal if no sales growth for the years 2011 and 2012. There has also been a lot of downgrades from many prominent forms. What matters to us is that the stock is currently sitting at prices unseen since the last days of the bottom of the financial crisis in April 2009. This is a great entry point.

Entry strategy
For the cautious investor:
Buy the stock for 31$ or less.

For the risk-taking trader:
The June 2011 30$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 135$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 35$, or keep it until 40$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 35$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

PHH Corporation (NYSE: PHH) Q2 2011 Price Target

Recent price: 21.05$
P/E Ratio: 24.61
3 Months Target Price: 25.00$

Company Description
According to Reuters, PHH Corporation (PHH), incorporated in 1953, is a outsource provider of mortgage and fleet management services. It conducts its business through three operating segments: Mortgage Production, Mortgage Servicing and Fleet Management Services. The Company’s Mortgage Production segment originates, purchases and sells mortgage loans through PHH Mortgage Corporation and its subsidiaries (PHH Mortgage), which includes PHH Home Loans, LLC (together with its subsidiaries, PHH Home Loans or the Mortgage Venture) and Speedy Title & Appraisal Review Services LLC (STARS). Its Mortgage Servicing segment services mortgage loans originated by PHH Mortgage and PHH Home Loans, purchases MSRs and acts as a subservicer for certain clients that own the underlying mortgage servicing rights (MSRs). The Company’s Fleet Management Services segment provides commercial fleet management services to corporate clients and government agencies throughout the United States and Canada through its wholly owned subsidiary, PHH Vehicle Management Services Group LLC (PHH Arval).


Confidence Margins
Strong resistance $25.93 (+23%)
Light resistance $25.30 (+20%)
Light support $20.94 (-1%)
Strong support $19.68 (-7%)

Recommendation
After releasing it's fourth quarter and full year results, PHH Corporation saw it's shares getting hammered and the change of CFO did not help the market's confidence. The stock is currently in a narrow channel so investors should watch for the stock if it went under both supports as there is still some downside left in the short term.

Entry strategy
For the cautious investor:
Buy the stock for 21.50$ or less.

For the risk-taking trader:
The August 2011 22.50$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 135$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 25$. It is highly recommended to keep the position on check as it still has some downside potential.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 25$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

LoJack Corporation (NASDAQ: LOJN) Q2 2011 Price Target

Recent price: 4.62$
P/E Ratio: -
3 Months Target Price: 6$

Company Description
According to the company's investors relations website, LoJack Corporation is the premier worldwide provider of wireless tracking and recovery systems for mobile assets. It also is the leader in global stolen vehicle recovery, with its unrivaled, proven solutions and direct integration with law enforcement. LoJack created the stolen vehicle recovery category over 20 years ago and has earned a more than 90 percent recovery success rate. Globally, more than 250,000 stolen vehicles worth over $5 billion have been recovered using LoJack technology.

LoJack operates in areas of the country with the greatest population density, highest number of new vehicle sales and greatest incidents of vehicle theft. LoJack is currently operable in 28 states and the District of Columbia, as well as more than 30 countries throughout Europe, Africa, Asia, and the Western Hemisphere.


Confidence Margins
Strong resistance $7.36 (+59%)
Light resistance $5.74 (+24%)
Light support $4.25 (-8%)
Strong support $3.73 (-19%)

Recommendation
LoJack Corporation has was downgraded on march 25 by JPMorgan Chase & Co following the company's quarterly results. There has been a lot of selling pressure on the company recently and it seems that the stock has reached the bottom. Current price levels are a good entry point.

Entry strategy
For the cautious investor:
Buy the stock for 5$ or less. Wait for the stock to test the resistance of it's current down trend before getting in.

For the risk-taking trader:
The June 2011 5$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 150$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 6$, or keep it until 7.10$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 6$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Saturday, March 26, 2011

Marauder Ressources East Coast (MES.V): An Overrated Penny Stock?

Investing in a penny stock is a bad ideas most of the time, they are very risky and are pretty easily manipulated. It seems however that one can come across interesting companies trading on the TSX Venture Exchange. Going through some screenings recently, I came across this company with some impressive valuations. Marauder Ressources East Coast principal business is the exploration for and the (potential future...) production of pretroleum and natural gas reserves off the east coast of Canada (for now) and elsewhere.

What is interesting to notice at first is that a lot of populat sites like google finance do not provide a lot of information about the financials of the company. Looking deeper on the website of SEDAR for their most recent quarterly earnings report, dated september 30th 2010. The company seems under valued. Here are some summary financial information about the company. All amount are in thousands of dollars.

Balance Sheet for the year ended 2009


Evolution of Liabilities and Equity over the last five years
Income Statement for the year ended 2009



Cashflow statements for the year ended 2009


Currently, the company does not sell any of the ressources that are on their fields. If they manage to find a way to exploit those fields of if s company comes to acquire a part of their assets, This would be greatly valuable for shareholders of the company.

One good example is the sale of it's interests, in July 2009 of certain zones in Production License 2901, Offshore Nova-scotia, to Encana Corporation, operator of the Deep Panuke Natural Gas field. Marauder Ressources East coast received 3.5 Million CAD in the transaction, plus an overriding royalty on the future production from two currently non-producing exploration licenses offshore of Greenland.

As the company will not have enough cash fo finance it's own exploration of the area and that their principal sources of cash is the issuance of debt or equity. The first option has not been used yet, and probably will not be used since the company doest not generate enough cashflows from it's continuing operations to justify a loan from any right minded bank or investor.

Their main assets are currently their petroleum and natural gas properties, with an aggregate value of a little over 32 million CAD. With liabilities mainly composed of a differed

It seems that investors have been very discouraged with this company. To the point that they have left the company for dead. As it can be seen from the company's balance sheet. Equity stands at 27 million CAD. With the 63 millions shares currently trading, that makes for a book value per share of 0.39$ and the stock is trading at 0.07$ that makes for over a possible 450% return for investors willing to be patient enough for a favourable event to happen to the company. At current prices, the company can't issue many shares for fear of massively diluting current shareholders.

Another interesting fact is that insiders of the company have been exercising options over the last couple of months to acquire about 4.4 million shares in the company when the company's stock was trading at around 0.05$ per share. This might be good news for the stock.


This is a very risky position but the reward might justify the risk. Keep in mind however that investing in penny stocks is extremely risky.


Disclosure: The author is long MES.V

Monday, March 14, 2011

Questcor Pharmaceuticals Inc (NASDAQ: QCOR) Q2 2011 Price Target

Recent price: 13.45$
P/E Ratio: 24.90
3 Months Target Price: 14.77$

Company Description
According to Reuters, Questcor Pharmaceuticals Inc is a pharmaceutical company focused on diseases and disorders. Questcor’s primary drug is H.P. Acthar Gel (repository corticotropin injection), an injectable drug that is approved by the United States Food and Drug Administration (FDA) for the treatment of a variety of diseases and disorders. Acthar is also used in treating patients with infantile spasms (IS), a rare form of refractory childhood epilepsy, and opsoclonus myoclonus syndrome, a rare autoimmune-related childhood neurological disorder, but is not approved for the treatment of either disorder. Acthar is approved to induce a diuresis or a remission of proteinuria in the nephrotic syndrome (NS) without uremia of the idiopathic type or that due to lupus erythamatosus. The Company also markets Doral (quazepam), which is indicated for the treatment of insomnia. As of December 31, 2009, Acthar is approved in the United States for the treatment of multiple sclerosis (MS) exacerbations, nephrotic syndrome and many other conditions.


Confidence Margins
Strong resistance $16.67 (+24%)
Light resistance $14.77 (+10%)
Light support $12.16 (-10%)
Strong support $9.33 (-31%)

Recommendation
Shares of Questcor Pharmaceuticals fell during the month of February after an article published in the Barron's over the weekend, raised concerns about sales of the company's main drug Acthar. Even if this information proves to have grounds in the long term, shares of the company are currently trading at interesting multiples and offer a good entry point in the stock.

Entry strategy
For the cautious investor:
Buy the stock for 14$ or less.

For the risk-taking trader:
The July 2011 14$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 190$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 14.75$, or keep it until 16$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 14.75$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

US Airways Group Inc (NYSE: LCC) Q2 2011 Price Target

Recent price: 9.18$
P/E Ratio: 3.69
3 Months Target Price: 11$

Company Description
As it can be seen from Reuters data, US Airways Group, Inc. (US Airways Group) is a holding company whose business activity is the operation of network air carrier through its wholly owned subsidiaries US Airways, Inc. (US Airways), Piedmont Airlines, Inc. (Piedmont), PSA Airlines, Inc. (PSA), Material Services Company, Inc. (MSC) and Airways Assurance Limited (AAL). MSC and AAL operate in support of its airline subsidiaries in areas, such as the procurement of aviation fuel and insurance. The Company has hubs in Charlotte, Philadelphia and Phoenix and a focus city in Washington at Ronald Reagan Washington National Airport (Washington National). During the year ended December 31, 2010, the Company offered scheduled passenger service on more than 3,200 flights daily to more than 200 communities in the United States, Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. The Company also has East Coast route network, including the US Airways Shuttle service. The Company has code share arrangements with air carriers to operate under the trade name US Airways Express.

During 2010, the Company had approximately 52 million passengers boarding its mainline flights. During 2010, its mainline operation provided scheduled service or seasonal service at 132 airports. As of December 31, 2010, it operated 339 mainline jets and was supported by its regional airline subsidiaries and affiliates operating as US Airways Express under capacity purchase agreements, which operated 231 regional jets and 50 turboprops. As of December 31, 2010, the Company’s prorate carriers operated 10 turboprops and three regional jets.

The Company’s US Airways Express partners carry passengers to its hubs from low-density markets to serve with large jets. In addition, US Airways Express operators offer operating flights during off-peak periods between mainline flights. During 2010, the US Airways Express network served 155 airports in the continental United States, Canada and Mexico, including 75 airports also served by its mainline operation. During 2010, approximately 28 million passengers boarded US Airways Express air carriers’ planes, approximately 44% of whom connected to or from its mainline flights. As of December 31, 2009, US Airways is a member of the Star Alliance, an airline alliance, which had 27 member airlines serving approximately 1,160 destinations in 181 countries.


Confidence Margins
Strong resistance $12.26 (+39%)
Light resistance $11.28 (+28%)
Light support $6.60 (-25%)
Strong support $5.70 (-36%)

Recommendation
Airlines are unfairly getting beat down by the markets. Recent raises in the oil prices are having an immediate effect on the stock price of US Airways Group while there is no sign of what the real impact will be. At current prices, it is a good entry point as the position will get back to previous levels as the volatility in the price of energy will fade.

Entry strategy
For the cautious investor:
Buy the stock for 9.50$ or less.

For the risk-taking trader:
The June 2011 9$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 140$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 11$, or keep it until 12$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 11$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

Carnival Corporation (NYSE: CCL) Q2 2011 Price Target

Recent price: 39.84$
P/E Ratio: 16.20
3 Months Target Price: 44.50$

Company Description
According to Reuters, Carnival Corporation, incorporated in 1972, is a cruise and vacation company. The Company has a portfolio of cruise brands and is a provider of cruises to vacation destinations. The Company has two cruise segments: North America, and Europe, Australia & Asia (EAA). Its North America segment cruise brands include Carnival Cruise Lines, Holland America Line, Princess Cruises (Princess) and Seabourn. Its EAA segment cruise brands include AIDA Cruises (AIDA), Costa Cruises (Costa), Cunard, Ibero Cruises (Ibero), P&O Cruises (UK) and P&O Cruises (Australia). In addition to its cruise brands, the Company has a Cruise Support segment that includes its cruise port and related facilities located in Cozumel, Mexico; Grand Turk, Turks and Caicos Islands; Long Beach, California, and Roatan, Honduras. Cruise Support also includes other corporate-wide services. In addition to its cruise operations, the Company owns Holland America Princess Alaska Tours, which is a tour company in Alaska and the Canadian Yukon, which primarily complements its Alaska cruise operations. As of November 30, 2010, the tour company owned and operated, among other things, 15 hotels or lodges, with 3,420 guest rooms, 395 motorcoaches and 20 domed rail cars. As of November 30, 2010, the Company owned a 40% interest in Grand Bahamas Shipyard Ltd. (GBSL).


Confidence Margins
Strong resistance $48.14 (+21%)
Light resistance $44.90 (+13%)
Light support $38.92 (-2%)
Strong support $35.21 (-12%)

Recommendation
As a major cruise line, the company has recently suffered from the rise in energy prices. But as the market leader, with a 44% market share, Carnival corporation enjoys a competitive advantages and economies of scale that competitors do not. Also, the company unveiled poor results for it's first quarter of 2011 and this sent Carnival Coporation's stock plunging. As the market leader, the company remains positioned to fully take advantage of future price stabilization in the energy sector.

Entry strategy
For the cautious investor:
Buy the stock for 40.50$ or less.

For the risk-taking trader:
The June 2011 40$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 310$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 44.50$, or keep it until 48$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 44.50$. This should provide a very interesting return when the underlying reaches the target price as the contracts gets in the money.

Royal Caribbean Cruises Ltd (NYSE: RCL) Q2 2011 Price Target

Recent price: 43.55$
P/E Ratio: 17.28
3 Months Target Price: 39$

Company Description
Royal Caribbean Cruises Ltd. is the world’s second largest cruise company, operating the Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Club Cruises and CDF Croisieres de France brands, with 40 ships and a passenger capacity of approximately 92,300, and TUI Cruises through a 50% joint venture.

These brands offer an array of onboard activities, services and amenities, including simulated surfing, swimming pools, sun decks, beauty salons, exercise and spa facilities, ice skating rinks, in-line skating, basketball courts, rock climbing walls, miniature golf courses, gaming facilities, lounges, bars, Las Vegas-style entertainment, cinemas and Royal Promenades, which include interior shopping, dining and an entertainment boulevard.

The company will introduce two more ships by the end of 2012. The current ships operate worldwide with a selection of itineraries that call on approximately 400 destinations.



Confidence Margins
Strong resistance $49.96 (-15%)
Light resistance $45 (-3%)
Light support $39.73 (+9%)
Strong support $32.85 (25%)

Recommendation
Even if the company is doing pretty well financially, it seems that the recent rise in the price of crude oil will have adverse effects on the future performance of the company. It is pretty clear that this scenario will have a negative impact on the performance of the stock price at least until energy prices stabilize.

Entry strategy
For the cautious investor:
Sell short the stock for 42$ or more.

For the risk-taking trader:
The June 2011 42$ out-of-the-money put option contract seems to be the right position to take, they can be acquired for about 335$ per contract.

Exit Strategy
For the cautious investor:
Buy to cover when the stock reaches 39$, or keep it until 33$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour as a favorable upside market movement could have devastating consequences.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 39$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

ANADIGICS Inc (NASDAQ: ANAD) Q2 2011 Price Target

Recent price: 4.47$
P/E Ratio: 317.04
3 Months Target Price: 6.50$

Company Description
According to data provided by Reuters, ANADIGICS, Inc., incorporated in 1984, is a provider of semiconductor solutions in the broadband wireless and wireline communications markets. The Company’s products include power amplifiers (PAs), tuner integrated circuits, active splitters, line amplifiers and other components, which can be sold individually or packaged as integrated radio frequency (RF) and front end modules. The Company offers third generation (3G) products that use the wideband code-division multiple access (W-CDMA) and enhanced data rates for global system for mobile communication evolution (EDGE) standards and combinations of W-CDMA and EDGE platforms (WEDGE), beyond third generation (3.5G) products that use the high speed packet access (HSPA, inclusive of downlink and uplink) and evolution data optimized (EVDO) standards, fourth generation (4G) products for worldwide interoperability for microwave access (WiMAX) and long term evolution (LTE), wireless fidelity (WiFi) products that use the 802.11 a/b/g and 802.11 n (multiple input multiple output (MIMO)) standards, cable television (CATV) cable modem and set-top box products, CATV infrastructure products and fiber-to-the-premises (FTTP) products.

The Company classifies its revenues based upon the end application of the product, in which its integrated circuits are used. During the year ended December 31, 2009, wireless accounted for approximately 68% of its total net sales, while broadband accounted for approximately 32% of its total net sales. The Company’s wireless product line includes power amplifier modules for CDMA/EVDO, GSM/EDGE, WCDMA/HSPA, LTE and other wireless technologies for mobile handsets and data devices. Its broadband product line encompasses video and data telecommunications systems, primarily consisting of CATV, WiFi and WiMAX applications.


Confidence Margins
Strong resistance $8.20 (+49%)
Light resistance $6.85 (+53%)
Light support $3.58 (-20%)
Strong support $3.00 (-33%)

Recommendation
Anadigics Inc is a very difficult candidate to evaluate. It seems that in the short term, the company is a great short candidate. Profits have been elusive, but the CEO and the CFO have been selling shares over the past quarter. It is therefore recommended to way before taking a position into this company or selling it short if it makes sense for you. However, Anadigics will prove to be a good long position to take for the coming quarter.

Entry strategy
For the cautious investor:
Buy the stock for 4.00$ or less, there is still some downside left; it is therefore suggested to way before taking a long position in this stock.

For the risk-taking trader:
The July 2011 5$ out-of-the-money call option contract seems to be the right position to take, they can be currently acquired for about 50$ per contract. Acquire then when the stock reaches the light support or if it breaks the downtrend resistance.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 6.50$, or keep it until 8$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 6.50$. This should provide a satisfactory returnas the contracts gets deeper in the money.

Monday, March 7, 2011

American International Group Inc. (NYSE: AIG) Q2 2011 Price Target

Recent price: 37.29$
P/E Ratio: 2.65
3 Months Target Price: 47$

Company Description
According to Reuters and AIG's website, American International Group, Inc. (AIG), is a holding company, which through its subsidiaries, is engaged primarily in a range of insurance and insurance-related activities in the United States and abroad. AIG's four reportable segments include: General Insurance, Domestic Life Insurance & Retirement Services, Foreign Life Insurance & Retirement Services, and Financial Services. American International Group, Inc. is a leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo.


Confidence Margins
Strong resistance $52.67 (+41%)
Light resistance $43.20 (+16%)
Light support $36.16 (-3%)
Strong support $34.01 (-9%)

Recommendation
This government controlled company offers a lot of potential to investors who are willing to ride the current restructuring of the company. There is a lot of upside room left and the company's stock has recently tested some of those levels. Backed by the U.S. government, it seems that this company can't go lower in term of price action and now is certainly a good time to acquire a position in this company.

Entry strategy
For the cautious investor:
Buy the stock for 38$ or less.


For the risk-taking trader:
The May 2011 37$ call option contract seems to be the right position to take, they can be acquired for about 278$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 47$, or keep it until 52$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes sour.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 47$. This should provide a incredible excess return if the underlying reaches the target price as the contracts will get deeper in the money.

Eastman Kodak Company (NYSE: EK) Q2 2011 Price Target

Recent price: 3.19$
P/E Ratio: -
3 Months Target Price: 2$

Company Description
According to Reuters, Eastman Kodak Company (Kodak), incorporated in 1901, is engaged in the sale of imaging products, technology, solutions and services to consumers, businesses and professionals. The Company’s products span digital still and video cameras and related accessories; consumer inkjet printers and media; digital picture frames; retail printing kiosks, APEX drylab systems and related media; KODAK Gallery online imaging services; prepress equipment and consumables; workflow software for commercial printing; electro-photographic equipment and consumables; commercial inkjet printing systems; document scanners; origination and print films for the entertainment industry; consumer and professional photographic film; photographic paper and processing chemicals, and wholesale photofinishing services. The Company operates in three business segments: Consumer Digital Imaging Group (CDG), Film, Photofinishing and Entertainment Group (FPEG), and Graphic Communications Group (GCG).


Confidence Margins
Strong resistance $3.84 (-20%)
Light resistance $3.48 (-9%)
Light support $3.00 (+6%%)
Strong support $2.00 (+37%)

Recommendation
The Eastman Kodak Company has lost most of the glow it had only 20 years ago. As reported on their last quarterly filing, the company is struggling and is not able to show any profit. Their products are not as appealing as those produced by the competition and the guidance they provided for 2011 disappointed many analysts and investors. This stock if a good bearish position to take.

Entry strategy
For the cautious investor:
Sell short the stock for 3.10$ or more.

For the risk-taking trader:
The July 2011 3.50$ put option contract seems to be the right position to take, they can be acquired for about 65$ per contract.

Exit Strategy
For the cautious investor:
Buy to cover when the stock reaches 2$, as shorting is a pretty risky strategy for a stock that has already fallen this much, it is suggested to keep the position on check if it would hover at current prices for a long time and even break the light resistance.


For the risk-taking trader:
The contracts should be kept until the underlying reaches around 2$. This should provide a very satisfactory return if the underlying reaches the target price as the contracts will get deeper in the money.

SatCon Technology Corporation (NASDAQ: SATC) Q2 2011 Price Target

Recent price: 3.71$
P/E Ratio: -
3 Months Target Price: 4.50$

Company Description
According to their IR website, Satcon is a leading provider of utility scale power solutions for the renewable energy market. Building on its history as a developer of sophisticated and precise power management and control equipment, Satcon develops innovative products that address the enormous demand for reliable, affordable and clean solutions for large commercial and utility scale applications. Satcon’s inverters are grid-tied and line interactive, enabling them to convert direct current (DC) power from solar arrays to alternating current (AC) power that is compatible with the utility voltage for export to the grid.

Satcon manufactures utility-grade solar PV inverters ranging from 30kW to 1MW. The company also sells a line of fuel cell inverters for systems ranging from 25kW to 2.4MW.


Confidence Margins
Strong resistance 5.51$ (+49%)
Light resistance 4.07$ (+10%)
Light support 3.18$ (-14%)
Strong support 2.87$ (-22%)

Recommendation
The company provided poor guidance on the conference call explaining results for the fourth quarter of 2010. This caused the stock to go sharply lower but there is a lot of upside left from a technical point of view. At current prices, this is a great entry point in acquiring a position in a company involved in an industry with great potential.

Entry strategy
For the cautious investor:
Buy the stock for 3.90$ or less.


For the risk-taking trader:
The June 2011 2.50$ call option contract seems to be the right position to take, they can be acquired for about 145$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 4.50$, or keep it until 5.30$ if you are more bullish in your own analysis. It is highly recommended to keep the position on check if it goes under the light support.


For the risk-taking trader:
The contracts should be kept until the underlying reaches around 4.75$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get deeper in the money.