Thursday, April 21, 2011

Orion Marine Group, Inc. (NYSE: ORN) Q2 2011 Price Target

Recent price: 9.68$
P/E Ratio: 12.02
3 Months Target Price: 12$

Company Description
Orion Marine Group, Inc. is a marine specialty contractor serving the heavy civil marine infrastructure market. It provides a range of marine construction services on, over and under the water along the Gulf Coast, the Atlantic Seaboard and in the Caribbean Basin. In addition, it provides dredging, repair and maintenance, and other specialty services. Orion’s customers are federal, state and municipal governments, as well as private commercial and industrial enterprises.

Confidence Margins
Strong resistance $15.88 (+64%)
Light resistance $13.86 (+33%)
Light support $9.36 (-3%)
Strong support $8.00 (-17%)

Orion Marine Group has seen it's shares being surrendered by shareholders following the report of it's fourth quarter results. Following the announcement, earnings guidance for fiscal year 2011 didn't reassure investors. At current price levels, opening a long position will provided satisfactory returns.

Entry strategy
For the cautious investor:
Buy the stock for 10$ or less.

For the risk-taking trader:
The June 2011 10$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 55$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches $12, or keep it until 15.50$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 12$. 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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