Thursday, April 21, 2011

DeVry Inc (NYSE: DV) Q2 2011 Price Target

Recent price: 48.28$
P/E Ratio: 11
3 Months Target Price: 56$

Company Description
DeVry Inc. is a provider of educational services and the parent organization of Advanced Academics, Becker Professional Education, Carrington College and Carrington College California, Chamberlain College of Nursing, DeVry Brasil, DeVry University, and Ross University. These institutions offer a range of programs in business, healthcare and technology and serve students in middle school through postsecondary education, as well as accounting and finance professionals. DeVry University provides bachelor’s and master’s degree programs in technology; science, business and the arts. DeVry University is a private, degree-granting, regionally accredited, higher education systems in North America. Ross University is a provider of medical and veterinary medical education. Chamberlain College of Nursing offers associate, bachelor’s, master’s and degree completion programs in nursing at its seven campuses in the United States and online.

Confidence Margins
Strong resistance $59.53 (+23%)
Light resistance $56.43 (+17%)
Light support $48.03 (-1%)
Strong support $40.25 (-17%)

Shares of DeVry Inc have not been spared by the wave of negativity hitting the whole industry of private education as they are announcing first quarter results that are coming very short of what analysts were expecting. Keep this stock on watch as it could yield good returns.

Entry strategy
For the cautious investor:
Buy the stock for 50$ or less.

For the risk-taking trader:
The August 2011 50$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 420$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 56$, or keep it until 59$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 56$. 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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