Wednesday, February 11, 2009

Insituform Technologies (INSU) Prices 9 Million Shares @ $13

TweetThis
Insituform Technologies (INSU) announced the pricing for the shares they are floating to fund their 2 acquisitions; the price is actually quite poor - way down at $13. The stock is under pressure this morning - we are taking a bath on the small position we do have (0.9% stake at this time) and this is why we cut back positions once they break support. In yesterday's piece on this company [Feb 10: Insituform Technologies with Favorable Mention in Investor's Business Daily]

When the stock broke below a key long term support the next day I actually cut back this position in half [Feb 3: Stopped out of Half of Insituform Technologies] and we're kind of in limbo here. The 200 day moving average is around $16.60s and the stock has reached that level intraday three of the last four sessions before retreating. So I cannot commit more dollars here and a case could actually be made for shorting it until it jumps back over the 200 day.

Because the stock made such a huge run (much of it on stimulus hope) we don't have much in terms of support if we begin to break down. In fact,
if $15 breaks you could see this back down to $12 to $13 in a jiffy.


In retrospect I guess I should of listened to myself and followed through on the short side to hedge myself. Obviously this is a completely broken chart but I'll begin to add down there in the $12 to $13 range. If it falters down past $11 we'll be compelled to cut back though. Pre market we're in the $13.60s and I'd expect something close to $13 relatively soon. This won't be a quick "rebound" type of stock but a compelling valuation if we can get those price points.
  • Insituform Technologies Inc (INSU), a provider of technologies and services for repairing underground piping systems, said it will offer 9 million class A common shares at $13 apiece for net proceeds of about $111.2 million. The offer price represents a discount of about 9 percent to the stock's Tuesday closing price of $14.22.
Long Insituform Technologies in fund; no personal position


Disclaimer: The opinions listed on this blog are for educational purpose only. You should do your own research before making any decisions.
This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses you might sustain from the content provided.

Copyright @2012 FundMyMutualFund.com