2:30pm (EST)
We have a New Trade for our Weekly Wrap on a stock we feel can double over the next 6-12 months. Shares are just under $7 and we are expecting a quick run to double-digits and then a possible push to $12-$14 by February 2014.
We are also recommending a LEAP call option trade on the stock that could be even more explosive if our price targets are reached. The options are currently at 50 cents and a 10 contract trade would cost $500, or 1 contract would cost just $50. If shares reach $12 the options will be worth at least $2. The return would be 300%.
A 10 contract trade would turn $500 into $2,000 while 1 contract would zoom from $50 to a value of $200.
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MEMBERS AREA
New Trade!!!
Buy Millennial Media (MM, $6.95, up $0.12) Stock Trade
Buy to OPEN February 10 calls (MM140222C00010000, $0.50, up $0.05) LEAP Option
Action: Shares are heavily discounted following the company’s IPO in late March 2012. The stock opened at $25 and reached $27.90 before closing at $24 on its first day of trading. It has been all downhill since the debut as shares tested $10 six weeks later. The recent low of $5.87 was touched in early April and shares appear to have bottomed.
The company is a big player in the mobile ad space and is turning the corner on profits. Shares are down 75% from their IPO and we feel as though double-digit prices are just around the corner. The 6 analysts that follow the stock have pegged Millennial losing a penny a share or profiting as high as 11 cents a share. The average estimate is 4 cents.
If earnings come in north of 4 pennies, shares should get a lift of 5%-7% but if they come in at 12 cents or better the stock could zoom 10%-20%.
We like this stock straight-up and we will wait to sell call options against the position. We are also recommending the February 10 calls as a LEAP option trade.