Watching Lexmark International Inc.

Posted on December 5, 2005 , filed under Stocks | Print This Post

Shares of LXK, Lexmark International Inc. have dropped over disappointing 3rd quarter results and a bleak outlook for the company’s near term revenue. Lexmark has failed to meet analyst estimates 3 quarters in a row. Shares of LXK are being held up by talks of a possible LBO, Leveraged Buy Out. LXK presents an interesting short opportunity with a follow up reversal play. Shares of LXK dropped almost a third, in the beginning of October, after the company lowered its 3rd quarter outlook in half. LXK is trading close to a 5 year low and about half of its one year high. If rumors of an LBO don’t pan out, I expect to see further drops in the stock price to around low $30′s or high $20′s.

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