Tuesday, May 24, 2011

Alaska Communications Systems Group Inc (NASDAQ: ALSK) Q3 2011 Price Target

Recent price: 8.84$
P/E Ratio: -
3 Months Target Price: 29$

Company Description
According to Reuters, Alaska Communications Systems Group, Inc. (ACS) provides integrated communications services in Alaska. The Company’s wireline and wireless communications networks extend throughout Alaska and connect to the Lower 48 states via its two diverse undersea fiber optic cable systems. The Company operates through two business segments: Wireline and Wireless. The Wireline segment provides communications services, including voice, data, broadband, multi-protocol label switching (MPLS) services, network access, long-distance and other services to consumers, carriers, businesses and enterprises, and government customers throughout Alaska and to and from Alaska. The Wireless segment provides wireless voice and data service and products and other value-added services and equipment sales across Alaska.

Confidence Margins
Strong resistance $11.65 (+32%)
Light resistance $11.01 (+25%)
Light support $8.69 (-2%)
Strong support $8.42 (-5%)

this telecommunication company is highly undervalued by the market since providing guidance for it's revenues that was in line with what analysts were expecting. Current prices will provide a good return for investors willing to open a long position now.

Entry strategy
For the cautious investor:
Buy the stock for 9$ or less.

For the risk-taking trader:
The October 2011 10$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 30$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 11$, or keep it until 11.50$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 11$. 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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