Tuesday, March 1, 2011

FTI Consulting, Inc. (NYSE: FCN) Q2 2011 Price Target

Recent price: 33.40$
P/E Ratio: 22.08
3 Months Target Price: 38$

Company Description
Based on information provided by Reuters, FTI Consulting, Inc. (FTI), incorporated in 1982, is a global business advisory firm. The Company assists its customers in addressing a range of business challenges, such as restructuring (including bankruptcy), financing and credit issues and indebtedness, interim business management, forensic accounting and litigation services, mergers and acquisitions (M&A), antitrust and competition matters, electronic discovery, management and retrieval of electronically stored information, reputation management and strategic communications. As of December 31, 2009, the Company had operations across 37 United States cities and 21 foreign countries, which includes United Kingdom, Ireland, France, Germany, Spain, Belgium, Russia, Australia, China (including Hong Kong), Japan, Singapore, the United Arab Emirates, Bahrain, South Africa, Argentina, Brazil, Colombia, Panama, Mexico, Canada and the British Virgin Islands. FTI operates in five segments: Corporate Finance/Restructuring, Forensic and Litigation Consulting, Economic Consulting, Technology and Strategic Communications.

Confidence Margins
Strong resistance $45.97 (+37%)
Light resistance $38.32 (+14%)
Light support $32.62 (-3%)
Strong support $30.78 (-8%)

At the moment of releasing it's fourth quarter and full year results, the company beat the estimates that the analysts had forcasted for EPS. But on the conference call, at the moment of providing revenue guidance, the figures provided by the company were weaker than expected. This sent the stock plunging, providing investors with a great opportunity. This should however be a position to close before the next earnings release as improving economic conditions will prove adverse to the company's development.

Entry strategy
For the cautious investor:
Buy the stock for 34$ or less but stay informed for coming developments and most importantly, the light support if the stock comes to pass across it.

For the risk-taking trader:
A position in the June 2011 34$ out of the money call option will yield a satisfactory return to investors, they can be acquired for about 185$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 38$, or keep it until 45$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 38$, 45$ if you are more bullish. 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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