Stock is likely to gap up at the open Tuesday July 24, after they report
earnings at or above estimates, and reiterate guidance of GAAP eps
$1.27-1.42.
Selloff in May was due to following factors:
1) Got bumped off S&P 500 April 30
2) An analyst downgraded it April 30
3) Market sold off big time over European debt crisis and slowing U.S. economy
4) Selling momentum and shorting above $5
Rebound from bottom $4.05 has begun, beginning with takeover
speculation, due to extremely oversold valuation. Next phase of rally
will be fueled by good execution and guidance affirmation, followed by
renewed takeover speculation, with some analysts expecting a 50% premium
above whatever the stock trades at = $7.50 if stock at $5, for example.
Also, they'll likely announce the quarterly dividend around earnings
date, a little before or after July 24, restoring confidence that the
dividend will remain, and reinforcing the argument that SVU belongs
closer to $7 than $5.
SVU $5.05
August target = $5x trailing / forward eps $1.25 / $1.27-1.42 = $6-7
Best of luck in your trades
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