Thursday, April 21, 2011

Meritor Inc. (NYSE: MTOR) Q2 2011 Price Target

Recent price: 16.58$
P/E Ratio: -
3 Months Target Price: 20$

Company Description
Meritor Inc., formerly ArvinMeritor, Inc., incorporated in 2000, is a global supplier of a range of integrated systems, modules and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation and industrial sectors. The company serves commercial truck, trailer, off-highway, military, bus and coach and other industrial OEMs and certain aftermarkets, and light vehicle OEMs. It operates in three segments: The Commercial Truck, The Industrial segment and The Aftermarket & Trailer segment. Its products are axles, undercarriages, drivelines, brakes and braking systems, and roofs and door systems. ArvinMeritor serves a range of customers worldwide, including medium- and heavy-duty truck OEMs, specialty vehicle manufacturers, certain aftermarkets, trailer producers and light vehicle OEMs.

Confidence Margins
Strong resistance $22.65 (+37%)
Light resistance $20.28 (+22%)
Light support $14.92 (-10%)
Strong support $13.60 (-18%)

This stock is technically poised for good returns, there is good strength in the current uptrend and the related resistances are still quite a way up.

Entry strategy
For the cautious investor:
Buy the stock for 17$ or less.

For the risk-taking trader:
The August 2011 17$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 175$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 20$, or keep it until 22$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 20$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

No comments:

Post a Comment