HAIN has been taking a beating lately, I think in large part due to the SEC investigation going on into their stock options practices. I don’t see this as a real threat to the long-term growth of their stock.
I’ve owned HAIN for months in my IRA and have sold covered calls on it a few times. One month 200 shares were assigned and I kept 200 shares as I had a different month expiration on my 400 shares. By the time the next expiration rolled around I was no longer ITM and kept the shares. I rewrote two covered calls then and didn’t buy any more shares, but held as HAIN started a slow fall. The bottom might not be here yet, but I think we are getting close and am taking a chance and bought another 200 shares in my IRA. Now I have 400 shares and two July 30 covered calls that are more than $3.50 OTM right now.
I used a limit order just under the earlier low of the morning and bought at 26.35. HAIN went as low as 26.34 before coming back up to 26.50 after I bought. The way I’ve drawn the chart I think this is near the low of the trading channel and I’m putting in a limit to sell if it comes back up to 27.05 this week. If it doesn’t sell this week I’ll rethink my time horizon, which in the end could be a long time. As I wrote about a while ago, our household is a big consumer of Hain Celestial products (organics) and I think the organic craze has some legs. I’m keeping my limit to sell so close because I see a possible near-term ceiling for HAIN around there. If I’m wrong and HAIN breaks through, I still have my other 200 shares to ride the rollercoaster back up. If I’m wrong and it falls further, I will likely consider buying more.
Here’s an interesting article on Hain I saw on Hilary Kramer’s Daily Picks & Pans.
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