Thursday, April 7, 2011

Logitech International SA (NASDAQ: LOGI) Q2 2011 Price Target

Recent price: 14.99$
P/E Ratio: 17.65
3 Months Target Price: 20$

Company Description
Logitech International S.A. (Logitech) is a provider of personal peripherals for computers and other digital platforms. The Company develops and markets products in personal computer (PC) navigation, Internet communications, digital music, home-entertainment control, gaming and wireless devices. With its acquisition of LifeSize Communications, Inc. on December 11, 2009, the Company entered the market for enterprise video conferencing products and services. The Company operates in two industry segments, personal peripherals and video conferencing. The personal peripherals segment encompasses the design, manufacturing and marketing of personal peripherals for PCs and other digital platforms. The video conferencing segment consists of the LifeSize division, and encompasses the design, manufacturing and marketing of high-definition (HD) video and audio communication products for the enterprise and small-to-medium business markets.

Confidence Margins
Strong resistance $23.26 (+55%)
Light resistance $20.10 (+34%)
Light support $14.45 (-4%)
Strong support $14.02 (-6%)

Shares of Logitech dropped sharply after-hours on March 31st after the company issued a statement cutting it's sales and net income before extraordinary items outlook for 2011. The drop is pretty much accounted for by the markets at current prices and Logitech and it provides a very good entry point for the coming quarter.

Entry strategy
For the cautious investor:
Buy the stock for 15.50$ or less.

For the risk-taking trader:
The September 2011 15$ 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 20$, or keep it until 23$ 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 20$.

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