DoubleClick: A Tactical Trade
08/08/2003 12:00 am EST
Bryan Perry -- head trader for the well-known ChangeWave Investing -- has now launched a new trading-oriented service called The Tactical Trader. One of the highlights of this exciting new service is its "trade of the week." The latest such trade is Internet firm, DoubleClick.
The latest "trade of the week" is DoubleClick (DCLK NASDAQ). The company is the leading provider of tools for advertisers, direct marketers, and Web publishers to plan, execute, and analyze their online marketing programs. DoubleClick's online advertising, e-mail marketing, and database marketing helps clients yield the highest return on their marketing dollar. In addition, the company's analytic tools help clients measure performance within and across channels.
"In the latest quarter, the company experienced a clear uptick in the volume of online advertising. Its ad serving volume increased to the highest level since the second quarter of 2002. The company is followed by 12 research firms, with two 'strong buys', one 'buy', six 'holds', two sells', and one 'strong sell'. So there is plenty of room for research upgrades in the coming weeks. The firm just checked in with a quarterly profit that was a penny better than estimates on a 5.8% sequential rise in quarterly revenues to $63.3 million. Earnings are expected to rise 66% in 2004.
"Technically, the stock broke out of what is called an 'ascending pennant formation' in March of this year, right at the $7 level on a big spike in volume, which validates the breakout. Given the strength of the upside volume figures as well as the positive trend in net-money flow, the stock ought to hold support in the mid-$10 area and make its way to the two-year resistance level of $15, our three-month price target. Such a move would result in a gain of more than 40% for cash accounts. Option traders should buy the DoubleClick January 7.50 Calls, which are currently trading at a price of $3.70 per contract. Our price target for the calls is $7.50, representing a projected gain of 100%. The premium for the January calls over the October calls is minimal and affords us more time."
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