Well, after watching IBN fall off a cliff the past few months, I decided to buy this morning (albeit I missed a better entry point a few days ago). In order to insure my position, I went in with the following:
IBN - Purchased 500 shares @ $30.30
IBN - Purchased 5 Sept 2013 PUT Options with a strike price of $30 at $.90/contract (for downside protection).
While I would have liked a lower entry point, I reviewed IBN's earnings report again and their financials are rock solid. In my view, this is a classic market overreaction to a sound financial services firm that happens to be one of the largest in India. Of course, it is silly to invest in anything these days without some protection, which is why I got the puts as well.
If your time horizon is more than 1 week and you're willing to hold IBN over the intermediate, medium, and/or long term, this is a great buying opportunity. However, if you're day-trading, then please ignore my post since it won't make any sense to you.
Agreed. Although I just completed my swing trade using December call options, I think your analysis is spot on. I'm hoping for a pull back to 28-29, so I can buy my options back. See my "ICICI is cheap" and "Fat Pitch" posts from last week. Like the housing market, stocks overreact to both sides. IBN getting this cheap in such a short time frame is a complete over reaction. Comparing the stats from 2007 when the stock was higher to the stats today with the stock lower, makes this a true fat pitch. Be greedy when others are fearful!