In a May 2007 “Smart Money” magazine article by Jack Hough, he lists 7 stocks, 5 with tickers and only 3 of those are optionable. This is my take on those three.
VOXX – schaeffersresearch.com rates it 7 – No Puts listed, at least not in Ameritrade, call premiums look decent if someone likes covered calls. Yahoo shows puts, but not for May. My research stopped when I saw no puts were available for me to trade on.
TV – schaeffersresearch.com rates it 6, good put premiums, but the chart doesn’t work for me yet. The potential trend lines I draw show a possible dip of at least a dollar to around $29.50, if not all the way down to $27.50. TV’s first moving average line to possibly provide support is the 10 day at 30.00, followed by the 20 day around 29.20. Both of those mean the best I’ll consider is a limit order for a put. I need some more to expire in May to keep me balanced. Bid ask for the May 30 is .70/.90. If TV drops to $29.50, the May 30 put might hit $1.50 with increased volatility. I’m putting in an alert to email me if it drops below 30 to consider again at that time. If I wasn’t fully invested right now I might go ahead with a limit to sell around $1.50, but I have no need to push it today.
TDW – schaeffersresearch.com rates it 5 – May 55 puts, nearly $4 OTM look decent for being that far OTM. The May 60 puts aren’t rich enough for me to be $1 ITM. I’m guessing that many people think oil prices will fall and hurt TDW because along with its competitors, TV’s p/e is historically low. Ford Equity Research rates it a hold. It looks like the biggest factor is the declining earnings growth and negative price momentum. Analysts forecasts are positive and TV is “Very undervalued according to earnings yield”, again according to FER’s 4/5/07 report. TDW has had a nice run lately, but I think it’s due for a small pullback to at least 57 and possibly 55. That still makes the May 55 put worth it to me. With a trailing p/e of 10.00, forward p/e of 9.66 and PEG of 0.17, I don’t think TDW will drop much below 55. If it does, I think I’ll have time to sell some covered calls on it to keep a good profit. Because I think it’s going to dip, I’m putting my limit in at $2.10 and will hope for an annualized return of 29% on it, 58% if I can maintain 50% of my portfolio on margin.
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