Will Ultra Electronics continue falling, or will it rise again back to 1475p December highs?

• Ultra Electronics shares have fallen over 10% today after disappointing results.
• Defense company reported trading in-line with expectations
• Working capital requirements rose, however, resulting in 65-75% cash convesion.
• Barclays has also downgraded it to Underweight, lowing the target price to 1120p.
• Shares almost -21.7% from 2018 highs; +15.5% from 2018 lows; -5.75% year-to-date.
• Already bounced 1-2% from the lows, now trading at 1250p (at time of writing).
• Source: Dow Jones, Bloomberg, FT, Company News, AlphaTerminal

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Trading Ultra Electronics – An Example

Let’s say you feel that the stock is a bargain and you think it could bounce back to December highs of 1475p. You decide to buy exposure to £10,000 worth of Ultra Electronics using a CFD, at the current price of 1250p. To do this, you need £2,000.

Let’s assume Ultra Electronics recovers back to 1475p (+18%). Your profit would be £1800, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 8% from the current price. Ultra Electronics falls 8% and hits your stop-loss. Your loss would be £800.

This is provided for information purposes only. It should not be taken as a recommendation.