Thursday, April 21, 2011

Crude Carriers Corp. (NYSE: CRU) Q2 2011 Price Target

Recent price: 11.89$
P/E Ratio: 10.80
3 Months Target Price: 15$

Company Description
According to Reuters, Crude Carriers Corp. is a transportation company. The Company is focused on conducting a shipping business focused on the crude tanker industry. It is focused on acquiring and operating a fleet of crude tankers that will transport mainly crude oil and fuel oil along worldwide shipping routes.

Confidence Margins
Strong resistance $17.40 (+46%)
Light resistance $15.43 (+30%)
Light support $11.27 (-5%)
Strong support $10.00 (-16%)

Shares of Crude Carriers Corp fell sharply after a downgrade by an Analyst at Wells Fargo. There are some good grounds for the downgrade, but at present levels the company offers pretty good fundamental and technical value to those willing to take a long position at current prices.

Entry strategy
For the cautious investor:
Buy the stock for 12.50$ or less.

For the risk-taking trader:
The June 2011 12.50$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 50$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 15$, or keep it until 17$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 15$. 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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