EOT Trade Alert January 7, 2014

| January 7, 2014

January 7, 2014

Trade Alert:

   Buy CMLS March 2014 $7.50 calls at $1.30 or better

Company Background:

Cumulus Media (CMLS) owns and operates commercial radio stations in the US.

Short-Term Catalyst:

CMLS is the fastest growing radio company in the US and the second largest operator of radio stations. The company has grown into a national powerhouse in the broadcast radio industry through 150 M&A transactions over the last several years.

Today, they currently have 525 stations in 110 markets.

The primary source of revenue for CMLS is advertising sales. Needless to say, any improvement in the US economy will be a positive for advertising sales and CMLS’s top and bottom line.

The best part of having such a big network of radio stations is the ability to give companies a national platform for their radio advertising.

CMLS has been able to leverage the size of their network into steady revenue and earnings growth this year. And earnings estimates for future quarters are on the upswing.

As a result, CMLS has been climbing steadily higher over the last several months.

This is a true momentum stock. And I’m expecting the bullish momentum to continue driving the share price higher through CMLS’s next earnings announcement in March.

Let’s grab call options on CMLS now to profit from further upside in this red hot momentum stock.

Trade Details:

Underlying Stock Symbol: CMLS
Current Bid-Ask Price: $0.80 – $1.15
Option “Buy Up To” Price: $1.30
Break-Even On Stock At Expiration: $8.80
Maximum Risk Per Contract: $130

Exit Strategy:

CMLS is currently trading at $8.00 per share. Resistance levels will be at $9.00 and again at $10.00. Remember, we want this stock to move higher. Support levels will be at $7.00 and the 50-day moving average (currently $6.87). Conservative investors should look to exit at the first support or resistance level. Aggressive investors may want to hold for a bigger move.



Category: EOT Trade Alert

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