Tuesday, March 29, 2011

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%)

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.

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