Believe the Hype - NOVA Chemicals

Before I move on to today’s topic, allow me to high-light a recent pick I made:


Those of you who took my advice on July 8 and picked up some Rogers Communications (or already owned some), should be pretty happy with recent stock analyst upgrades and stock price jump - hitting the 52-week high Tuesday July 17th. This stock hasn't stopped climbing either. I’m glad I own some.

Moving right along to today's topic, a highly-hyped stock, Nova Chemicals (NCX).

Believe the Hype

Check them out on Google Finance

Nova Chemicals is a strong acquisition target. RBC (Royal Bank of Canada) has listed this stock as their "top pick" with a price target of $53.00 - ouch! (currently trading after the bump at $40). Read all about it here. Analysts everywhere have bumped up the price target after Basell agreed to acquire Lyondell Chemical, fueling speculation of Nova being taken over and at a premium. RBC states:

"Nova Chemicals is a strong acquisition target due to its Alberta feedstock cost advantage, proprietary Performance Products production technology and North American footprint. The fundamentals for the company also remain attractive, as strong demand for polyethylene is leading to higher polyethylene prices, and the company faces high operating rates and relatively tight producer inventories."

For all you traders out there (as opposed to timid investors like me), this one has got fast money written all over it.

As always, do your own research - make sure your risk tolerance matches the stock. This one sounds pretty good - down-side versus upside are lopsided to the up.

DISCLOSURE: I do not own Nova Chemical stock (as of right now). Do your homework before you spend $$$ on a stock, no matter who recommends it.