The impressive equity appreciation story with Chicago Bridge & Iron (CBI), which I first wrote about on April 6, 2009 at a price of $7.31, continues, as the stock is testing psychological resistance at $40. Further, obviously, if you haven't already, if you're in at/near $7.31 or at a dollar-cost-average below $14, now may be a good time to consider taking some profits off the table with CBI.
However, those investors who can tolerate the risk can maintain their full position to go for a possible larger gain, as CBI will likely trade above $45 by the end of 2011.
Chicago Bridge & Iron specializes in projects that produce, process, store, and distribute the world's natural resources. In 2011, revenue should increase better than 15%, led by liquid natural gas business revenue; strength also appears to be building in Canadian oil sands projects and shale gas/unconventional gas projects. Meanwhile, margins should dip to about 12%.
Further, CBI's prospects for new business in developing markets in China, South America, Russia, and the Middle East provide further encouragement for investors.
The Thomson Reuters First Call FY2011/FY2012 EPS estimates for CBI are $2.38 to $2.73.
Technically, Chicago Bridge's stock chart is strong -- an uptrend, and one that rarely dips to the key, 50-day moving average -- a sign that institutional investors are not waiting long to add to positions in CBI.
2011 Outlook: I view Chicago as a long-term play, but if you're looking to sell CBI within the year, it's probably best to take your profits after it rises to $48-49, if it fails to clear $50.
Stock Analysis: I consider Chicago Bridge & Iron to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 50% position in CBI now; I'd put a sell/stop loss at: $22.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
Further, CBI's prospects for new business in developing markets in China, South America, Russia, and the Middle East provide further encouragement for investors.
The Thomson Reuters First Call FY2011/FY2012 EPS estimates for CBI are $2.38 to $2.73.
Technically, Chicago Bridge's stock chart is strong -- an uptrend, and one that rarely dips to the key, 50-day moving average -- a sign that institutional investors are not waiting long to add to positions in CBI.
2011 Outlook: I view Chicago as a long-term play, but if you're looking to sell CBI within the year, it's probably best to take your profits after it rises to $48-49, if it fails to clear $50.
Stock Analysis: I consider Chicago Bridge & Iron to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 50% position in CBI now; I'd put a sell/stop loss at: $22.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.