The stock came public in late 2006 around $21, and fell to a low of $2.31 in 2008. However, since then, the stock has been on a roll. It made a recent new all-time high at $37. A breakout to another new high could draw more buying from the new-high crowd.
This year, analysts are forecasting a 57% surge in profits to $1.21 a share from 77 cents a year ago. The stock sells with a price-earnings ratio of 29, which we see as reasonable.
For the upcoming fourth quarter, analysts are forecasting an 80% surge in profits to 36 cents a share from 20 cents a year ago. The highest estimate on the Street is at 42 cents a share.
We see chances for an upside earnings surprise. The past three quarters, MPEL topped the consensus estimate by two cents a share, eight cents, and one cent.
The stock came public in late 2006 around $21, and fell to a low of $2.31 in 2008. However, since then, the stock has been on a roll. It made a recent new all-time high at $37. A breakout to another new high could draw more buying from the new-high crowd.
With strong profits coming, we see MPEL in a good spot to be accumulated in anticipation of a breakout.
For now, we suggest a partial stake in MPEL with further buying to be done on a breakout over $37.20. We are then targeting MPEL for a move to $46. A protective stop can be placed near $34.
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