Hi Fellow Traders,
I am still working on getting a way to put graphs up. The Google app they want us to use doesn’t like my graphs that much. I am working with Google tech folks to see why the problems, so hopefully sometime this week I will be able to post some graphs with this.
We continued a pattern last week keeping with an old standby – NFLX (Netflix). The setup we saw two weeks ago was still in play and met all of our criteria so we just kept with it. The coming week we will have to watch since earnings for NFLX comes out on January 23. Usually there are rumors aplenty about what the numbers will be, but this time around there is nothing but silence – don’t know if that is good or bad, but I am thinking bad.
Kids are now back in school and so far doing well to start off the new semester.
Saturday I was a judge for a IHSSA (Iowa high School Speech Association) District Large Group Contest. I judged One-Act Plays. It was a lot of fun. High School kids these days are very creative. I just wish these opportunities had been available to me when I was in high school. We had plays, but only one a year until you were a senior, and no chance to go to contests for theatre or speech. We did get to go to Solo and Ensemble Festivals for Band and that was it. My school was very athletic oriented.
Now on to the analysis:
ANALYSIS
NFLX 92.50 Put $ 0.43
NFLX 87.50 Put $(0.13) This gave a $0.30 Credit for a 6.00% ROI
Now on to NFLX. This is a stock that has been very good to us recently. It has been on a long term up trend and last week I told you of my analysis that I thought NFLX would probably peak out at around $110. We during the week two other analysts who actually get paid to do analysis of NFLX said the same thing! Another Analyst for National Alliance Capital recently put a “Market Perform” rating on NFLX with a price target of $102. So it seems that I am in the ball park with my analysis of the big boys. So it looks like my analysis was pretty good. I still like NFLX for the longer term, but this coming week I will be cautious as NFLX has earnings announced on Wednesday 1/23/13. If I trade NFLX next week I will wait until after the earnings announcement. I put this trade on to take advantage of this info:
1. The long term trend is up so we look to go to the put side.
2. The Bollinger Band test was met Wednesday.
3. This spread had a 92% probability of success.
4. We were right at 1.5 Standard Deviations away from the underlying at the time of the trade.
5. The minimum of 3.00% ROI was more than met.
PAPER TRADE
The paper trade we did this week was on Apple (AAPL). I went out and bought a March 440 Put at $4.30. This was a cost of $430 to me. As of this morning (January 22) This was trading at $7.00. Right now I am sitting at a profit of $270 or 62.8%. I will close this trade before earnings on Thursday for AAPL. I think that AAPL is headed lower, but I have a nice profit and would rather bank it and put on another trade than risk the loss if the notoriously close lipped AAPL comes out like gangbusters.
Bought AAPL March 440 Put @ $4.30
*** UPDATE*** Sold Put @ $7.25 Profit of $295 for a ROI of 68.6%
COVERED CALLS
We still have our covered calls on Vivus. And I have added another to the mix this week. Chicago Bridge and Iron (NYSE: CBI). This stock is seeing an up trend toward its 52 week high of $47.77. The stock closed $44.70 on Friday and has been rising for most of the month. So we go with the January 48 Call.
Symbol Company Stock Option Premium Initial Annualized
VVUS Vivus 13.37 Feb16 .63 2,676.00 28.25%
Symbol Month Premium Month ROI Ann Month ROI Cum Prem Cum An ROI
VVUS January $32 1.19% 14.35% $32 14.35%
CBI January $50 1.12% 13.39%
VVUS – This stock is still in the $13-$15 range. This is my speculative play and currently I am in the hole overall for it. But I am continuing to collect call premium on it and I know they have some very promising drugs in the near future coming to market. If these are successful then we will more than likely get our overall investment back. In the meantime we just keep collecting the call premium.
CBI – AS I thought last week we did get called away with this stock. Also as I talked of earlier this was a win-win for us:
1. We collected the option premium of $50.
2. Then we collected a premium of $320 on the call away of the stock.
3. This is an 8.26% ROI for the month. I will take these type of returns any month of the year. This annualizes to 99.10%!!!
Symbol Invested $ Option Prem Call Away Total Return
VVUS $2,676.00 $32 $32 1.19%
CBI $4,480.00 $50 $320 $370 8.26%
Totals $7,516.00 $82 $320 $402 5.35%
I am looking for a replacement for CBI.
DIVIDEND STOCKS
Here are the two portfolios updated:
Ticker Name Buy Current Date Div
Price Price Yield
KO Coke 38.17 37.70 08/27/2012 2.71%
AGD Alpine Global Dynamic 5.76 5.57 08/27/2012 6.25% *
AOD Alpine Total Dynamic 4.37 4.23 08/27/2012 7.41% *
MO Altria 34.26 33.27 08/27/2012 5.17%
INTC Intel 22.87 21.25 10/01/2012 3.94%
HIX Western Asset Hi Inc II 10.53 10.15 10/15/2012 9.44%
MCD McDonald’s 91.74 92.26 10/30/2012 3.55%
MSFT Microsoft 28.55 27.25 10/30/2012 3.12%
JNJ Johnson and Johnson 68.03 73.23 11/23/2012 3.53%
PG Proctor and Gamble 68.72 69.94 12/21/2012 3.27%
Current Prices as of 01/18/2013 Closing Price
The GOP not being able to bring to a vote their “Plan B” for the fiscal cliff resolution brought the market down to end the week, and basically kept us from getting back to even price wise in many of our portfolio holdings. In the initial portfolio we do not reinvest dividends, treat it as an income generator. The new portfolio will start with the same dollar amount invested in each stock and will reinvest the dividends. The return of the second portfolio will differ since we will not have equal weighting and will reinvest the dividends so the monthly payers will grow a little faster than the quarterly payers. AGD, AOD and HIX are Closed End Funds that pay monthly dividends.
Both portfolios will carry a 15% stop on them. Portfolio #1 has 100 shares of each stock and will generate $1,254 in dividend revenue assuming no reinvestment. This gives a 4.12% return. Portfolio #2 will have $5,000 invested into each stock and there will be dividend reinvestment. I will carry shares out 3 decimal places. So here is how Portfolio #2 shakes out:
Ticker Name Buy Current Ex-Div.
Price Price Date Shares
KO Coke 36.89 37.70 02/27/2013 135.917
AGD Alpine Global Dynamic 5.76 5.57 02/19/2013 970
AOD Alpine Total Dynamic 4.37 4.23 02/19/2013 1,240
MO Altria 34.26 33.27 12/21/2012 148.894
INTC Intel 22.87 21.25 02/05/2013 240
HIX Western Asset Hi Inc II 10.53 10.15 02/13/2013 523.091
MCD McDonald’s 91.74 92.26 02/28/2013 55
MSFT Microsoft 28.55 27.25 02/19/2013 182
JNJ Johnson and Johnson 68.03 73.23 02/25/2013 71
PG Proctor and Gamble 68.72 69.94 01/17/2013 72
Buy Price Portfolio Value = $51,996.01
Current Price Portfolio Value = $51,404.06
Dividends Received So Far = $169.75
Dividend ROI = 0.33%
Portfolio Return = - 0.80%
So far our portfolio is slightly negative, primarily to Intel (INTC) and Microsoft (MSFT). The two Closed End Funds AOD and AGD from Alpine will also soon negatively impact the portfolio. They announced Friday after the close that they were cutting the monthly distribution in half. So in the short term this will hit us hard. Long term on these I still like them, but am upset on this dividend cut. Using our long term outlook on this portfolio we will still acquire shares and plug away.
Usually there is a watch list portion for the Dividend portfolio. But I have put all the watch list stocks into the portfolio. Now I am looking for replacement stocks for underperformers in the portfolio. But this will not be an easy task. Our three keys make getting on the list and then getting into the portfolio rather difficult. Here are the three keys: (1) a moat business model, (2) dividend of at least 3%, (3) solid fundamental analysis numbers.
Ticker Recent Date Div Target
Name Price Yield Price
QUESTIONS
No questions this week.
I did receive some questions over the holiday and I am working on the responses. Keep the questions and comments coming. I really enjoy reading them. If you have any ideas for what you want to see in future issues or topics you would like for me to discuss please send that as well.
As we start 2013 I want to try and make this a better blog and as informative as possible. Also you lurkers – sign up !!!! It doesn’t cost you anything; I don’t sell any info to anybody so sign up!
DISCLAIMER: Hashley Capital Management, LLC; as well as I are not giving any trading advice. All data is historical in nature and is intended for use as an educational tool. Trading in stocks and/or options is risky and can result in loss of capital. Stocks and options carry inherent risks and should be well researched before any buy/sell decision is made. There is no attempt to sell any brokerage services or act as a broker or dealer by Hashley Capital Management, LLC. Any forward looking comments on this blog are not attempts to solicit business for Hashley Capital Management, LLC and are the opinion of Hashley Capital Management only. If you choose to follow the same path and invest in the strategies and trades used by Hashley Capital Management, LLC after doing your own due diligence, that is your decision and yours alone.
Reach me @:
Twitter: @awagel01
Stocktwits: awagel01
Or leave a comment on the blog
TTFN
Ash
No comments:
Post a Comment