Moreover, it goes without saying that I'm reiterating my Buy rating for CBI, first recommended on April 6, 2009.
As expected, institutional investors (IIs) have looked right past CBI's FY2009 decline in revenue to better days and quarters in FY2010: widening margins, and a rebound in the U.S. refining and Canadian oil sands segments, all amid strong Middle East orders.
The above outlook is a major reason why IIs have been incrementally adding to their positions since spring, and that's produced a beautiful stock chart, from a technical standpoint: a staircase. Missed out on the $7.31 entry? Don't fret: CBI is headed much higher.
The First Call FY2009/FY2010 EPS estimates for CBI are $1.70 to $1.59. That $1.59 FY2010 estimate will likely prove to be very low.
Finally, the Sell/Stop Loss has been raised to $6.75, or to just under cost, from $3.
Stock Analysis: Chicago Bridge & Iron is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% position in CBI now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your CBI position before December 2009. Revised Sell/Stop Loss if you bought shares in this company: $6.75.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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