I am long myself. It is meaningless to make short term predictions such as " ALU WILL BE UP TODAY, $2.00 TARGET FOR TODAY" . First it reflect one's inexperience in investing. Second it is pie in the sky. Third, more important, all these frivolous posts on this board make it less relevant and professional.
Believe it or not, Alcatel-Lucent (NYSE: ALU) is now trading with a one-year gain, including a five day gain of 28%! The stock has returned 65% in the last three months as investors react to the company’s decision to restructure. This is a company with a market cap of less than $4 billion but has nearly $19 billion in sales. The company will now aim to sell and restructure much of its business over the next year to become more profitable with higher margins; and is able because of a $2 billion finance deal with Goldman Sachs. So far, investors have responded well to its plan.
On Monday Alcatel-Lucent rallied 5% after Goldman pulled the stock from its Conviction Sell list. This is encouraging because Goldman did the company’s financing deal. Alcatel has seen a number of upgrades as of late as investors buy into the idea of a more efficient Alcatel. In my opinion, the company is still grossly undervalued and has the potential to trade much higher. However, it won’t be overnight and the restructuring deal will take time to be properly executed. Therefore, I’d keep Alcatel on my watchlist, but also watch for periods of difficulty for good entry points.
The neat thing about a controversial stock is that my opinion is just as challenged as any investor who follows the company. For every bull there is a bear and these opinions are strong and loud. As a result, every catalyst and earnings report carries a lot of weight. But perhaps even more important are analyst calls, as controversial stocks react greatly to the opinions of analysts, and analysts respond well to stocks that trade higher. Therefore, with each of these stocks on the rise, I’d watch closely, and wouldn’t be surprised if each trades considerably higher before finding level ground.