Monday, November 24, 2014

Chicago Bridge and Iron Falls 5% on Goldman Downgrade

On November 24th Goldman Sachs issued a sell rating on Chicago Bridge and Iron (CBI).  This news pushed the stock down 4.96% to $54.26.  There was also a much higher volume of options being traded, with a large increase in put options, probably a reaction to the Goldman downgrade.  The bank did not give word on what caused the rating change from neutral to sell.

With a large amount of short interest in the stock, I look forward to a short squeeze after the company reports what I believe will be a strong fourth quarter and solid full year 2014.
CBI continues to be undervalued and maintains strong growth prospects.  The stock is only slightly below our buy-in price, and maintains a consensus target price with 25% upside.

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