Thursday, April 21, 2011

New York Community Bancorp, Inc. (NYSE: NYB) Q2 2011 Price Target

Recent price: 16.16$
P/E Ratio: 13.04
3 Months Target Price: 18$

Company Description
New York Community Bancorp Inc. is a bank holding company and a producer of multi-family mortgage loans in New York City, with an emphasis on apartment buildings that feature below-market rents. It has two bank subsidiaries: New York Community Bank (the Community Bank), a thrift with 242 branches serving customers throughout Metro New York, New Jersey, Ohio, Florida, and Arizona, and New York Commercial Bank (the Commercial Bank), with 34 branches serving customers in Manhattan, Queens, Brooklyn, Long Island, and Westchester County in New York. The Community Bank operates through seven local divisions: Queens County Savings Bank in Queens; Roslyn Savings Bank on Long Island; Richmond County Savings Bank on Staten Island; Roosevelt Savings Bank in Brooklyn; Garden State Community Bank in New Jersey; Ohio Savings Bank in Ohio, and AmTrust Bank in Florida and Arizona. Similarly, the Commercial Bank operates 17 of its branches under the divisional name Atlantic Bank.

Confidence Margins
Strong resistance $19.33 (+20%)
Light resistance $17.86 (+11%)
Light support $16.06 (-1%)
Strong support $15.45 (-4%)

As many companies during earnings season this quarter, New York Community Bancorp, Inc. came short of what analysts were expecting, sending the shares plunging. This is a good entry point for the quarter as more economic news will state that conditions are improving.

Entry strategy
For the cautious investor:
Buy the stock for 16.50$ or less.

For the risk-taking trader:
The July 2011 17$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 25$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 18$, or keep it until 19$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 18$. 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