Sunday, August 10, 2008
A Forex Carry Trade that makes Money!
I have personally been working on a way to consistently make money by doing forex "carry trading" for 5 years, and God has lead me to it. Now, some of you will be want to stop reading, but I ask you to read on. I absolutely give credit to God for all in my life, so I give him credit for this above all. The challenge had always been how do you protect your underlying investment when the market makes major moves, so you can still earn the interest will protecting your investment. If I have peaked your curiosity come back and I will continue to expound on this methodology (that is currently making money by the way). Thanks.
Thursday, February 28, 2008
2/28/2008
The markets gave back some of their gains for the week today. Below is the current status of our covered call trades for the month of March. To see the specifics of the trade, please review previous postings. These postings are for educational purposes only. All trading involves risk. Please do not invest money you cannot afford to loose.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $24,255
Net month to date account value - $27,334
Talk to you tomorrow.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $24,255
Net month to date account value - $27,334
Talk to you tomorrow.
Wednesday, February 27, 2008
2/27/2008
The markets were pretty undecided today. The good news was that OFHEO, the regulatory agency for Fannie Mae and Fredie Mac, raised their portfolio limits today. This will add needed liquidity to the credit markets. Below is the current status of our covered call trades for the month of March. To see the specifics of the trade, please review previous postings. These postings are for educational purposes only. All trading involves risk. Please do not invest money you cannot afford to loose.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $24,754
Net month to date account value - $27,833
Talk to you tomorrow.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $24,754
Net month to date account value - $27,833
Talk to you tomorrow.
Tuesday, February 26, 2008
2/26/2008
The markets got another nice boost today as IBM increased their earnings outlook for 2008. Below is the current status of our covered call trades for the month of March. To see the specifics of the trade, please review previous postings. These postings are for educational purposes only. All trading involves risk. Please do not invest money you cannot afford to loose.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $25,197
Net month to date account value - $28,276
Talk to you tomorrow.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $25,197
Net month to date account value - $28,276
Talk to you tomorrow.
Monday, February 25, 2008
2/25/2008
The markets got a nice boost today as S & P validated some of the bond issurers AAA rating. Below is the current status of our covered call trades for the month of March. To see the specifics of the trade, please review previous postings. These postings are for educational purposes only. All trading involves risk. Please do not invest money you cannot afford to loose.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $24,952
Net month to date account value - $28,031
Talk to you tomorrow.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $24,952
Net month to date account value - $28,031
Talk to you tomorrow.
Sunday, February 24, 2008
2/22/2008
Overall the markets were undecided on their intent today. Below is the current status of our covered call trades for the month of March. To see the specifics of the trade, please review previous postings. These postings are for educational purposes only. All trading involves risk. Please do not invest money you cannot afford to loose.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $23,475
Net month to date account value - $25,975
Talk to you tomorrow.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $23,475
Net month to date account value - $25,975
Talk to you tomorrow.
Thursday, February 21, 2008
2/21/2008
More negative data moved the US stock market down today. Below is a recap of where we are with our March portfolio. This is for educational purposes only. All trading has risk. Please do not risk money you cannot afford to loose.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $23,141
Net month to date account value - $26,220
Talk to you tomorrow.
Account based on $25,000
Total stock purchase - $24,496
Call premium - $2575
Return 10.1%
Current value of stock - $23,141
Net month to date account value - $26,220
Talk to you tomorrow.
Wednesday, February 20, 2008
Our March Portfolio
Well we have talked strategy and stocks for a while now. It is now time to show you what our March portfolio looks like. We will post this with results every trading day along with thoughts on different stocks and financial market situations. These trades are shown for educational purposes only. All investments have risk. Please do not invest money you cannot afford to loose.
The format is the stock symbol/description/quantity bought or sold/purchase or sale price.
Negative numbers mean the number of calls sold.
ARNA/ARENA PHARMACEUTICALS INC/700/$6.97
.UGGCU/ARNA MAR 7.5 Call /-7 /$0.85
CRME/CARDIOME PHARMA CORP/800/$6.02
.UXYCU/CRME MAR 7.5 Call/-8/$0.70
PGNX/PROGENICS PHARMA INC/400/$16.39
.GUBCW/PGNX MAR 17.5 Call/-4/$0.95
PMI/PMI GROUP INC/500/$7.51
.PMICU/PMI MAR 7.5 Call -5/$1.20
YGE/YINGLI GREEN EN HOLDING CO/200/$22.45
.YGECX/YGE MAR 22.5 Call/-2/$2.20
This account is based on a $25,000
$24,496 of stock purchased
$2,575 call premiums
Return 10.1%
Current profit loss on stock ($710)
Net month to date $1835
Talk to you tomorrow.
The format is the stock symbol/description/quantity bought or sold/purchase or sale price.
Negative numbers mean the number of calls sold.
ARNA/ARENA PHARMACEUTICALS INC/700/$6.97
.UGGCU/ARNA MAR 7.5 Call /-7 /$0.85
CRME/CARDIOME PHARMA CORP/800/$6.02
.UXYCU/CRME MAR 7.5 Call/-8/$0.70
PGNX/PROGENICS PHARMA INC/400/$16.39
.GUBCW/PGNX MAR 17.5 Call/-4/$0.95
PMI/PMI GROUP INC/500/$7.51
.PMICU/PMI MAR 7.5 Call -5/$1.20
YGE/YINGLI GREEN EN HOLDING CO/200/$22.45
.YGECX/YGE MAR 22.5 Call/-2/$2.20
This account is based on a $25,000
$24,496 of stock purchased
$2,575 call premiums
Return 10.1%
Current profit loss on stock ($710)
Net month to date $1835
Talk to you tomorrow.
Tuesday, February 19, 2008
The 3rd scenario
If you using a covered call strategy to generate monthly income, you need to evaluate each stock in your portfolio every month just like in the 2nd scenario. The difference is generally what return are you good with keeping in your portfolio. As we stated yesterday, call premiums change based on several different factors.
As we talked about yesterday if you can average 6% per month and reinvest, the power of compound interest grows your account balance very quickly. If you are taking all or part of the generated income every month you have to think about what % do you want to take out as income every month. If your account balance is $100,000 and you would like to generate $5000 or 5%, you have to think about your asset protection differently. In the first 2 scenarios, you leave you call premiums in the account for the long term which allows you to dollar cost average you stocks over the medium/long term. In those cases when a stock is no longer delivering the call premium you would like it is generally easier to liquidate since your account balance is continually growing. If you have a none performer you can liquadate the position and get into another stock that has a good call premium.
In this scenario since you are more than likely taking most or all of your premiums, you do not always have that luxury. When you are in any type of account to produce long term income, you have to protect your underlying investment. In this case, you have to protect your $100,000. That money is your instrument to generate income.
Lets think about that example. If in the above example you want to take 5% every month, we would suggest targeting at least 7-8%. That will give you the cushion you need to sell stock that you may have a negative balance on and the call premium has fallen significantly. Job number 1 is to keep that $100,000 whole so you can keep generating that monthly income.
Talk to you tomorrow.
As we talked about yesterday if you can average 6% per month and reinvest, the power of compound interest grows your account balance very quickly. If you are taking all or part of the generated income every month you have to think about what % do you want to take out as income every month. If your account balance is $100,000 and you would like to generate $5000 or 5%, you have to think about your asset protection differently. In the first 2 scenarios, you leave you call premiums in the account for the long term which allows you to dollar cost average you stocks over the medium/long term. In those cases when a stock is no longer delivering the call premium you would like it is generally easier to liquidate since your account balance is continually growing. If you have a none performer you can liquadate the position and get into another stock that has a good call premium.
In this scenario since you are more than likely taking most or all of your premiums, you do not always have that luxury. When you are in any type of account to produce long term income, you have to protect your underlying investment. In this case, you have to protect your $100,000. That money is your instrument to generate income.
Lets think about that example. If in the above example you want to take 5% every month, we would suggest targeting at least 7-8%. That will give you the cushion you need to sell stock that you may have a negative balance on and the call premium has fallen significantly. Job number 1 is to keep that $100,000 whole so you can keep generating that monthly income.
Talk to you tomorrow.
Monday, February 18, 2008
The 2nd scenario
When you are looking to do covered call strategies for longer term wealth growth, this is generally done in an IRA, the key thing to remember is you have to evaluate every stock at the end of every option month. Stock price volatility and/or the belief the stock will rise rapidly in the short term is what gets us a higher premium and therefore a better return.
If in the case of an account where you leave all the call premiums in the account, such as an IRA, your outlook may need to be a little different. Lets think about the powerful investing tool of compound interest. If you make 6% per month and reinvest that profit every month, you will double your money every 12 months. If you start with $4000 and double every year with our 6% per month, in 5 years you have $128,000 and you have over a million dollars in 8 years. This is a very powerful tool when planning for retirement.
Since stock volatility changes over time, we need to reevaluate our portfolio each month to see what rate of return you are receiving from each stock and its call premium. In an account where all premiums are held and reinvested in the account and the account grows tax free, you can afford to take less risk and accept less return and still grow your nest egg quite nicely.
Talk to you tomorrow.
If in the case of an account where you leave all the call premiums in the account, such as an IRA, your outlook may need to be a little different. Lets think about the powerful investing tool of compound interest. If you make 6% per month and reinvest that profit every month, you will double your money every 12 months. If you start with $4000 and double every year with our 6% per month, in 5 years you have $128,000 and you have over a million dollars in 8 years. This is a very powerful tool when planning for retirement.
Since stock volatility changes over time, we need to reevaluate our portfolio each month to see what rate of return you are receiving from each stock and its call premium. In an account where all premiums are held and reinvested in the account and the account grows tax free, you can afford to take less risk and accept less return and still grow your nest egg quite nicely.
Talk to you tomorrow.
Sunday, February 17, 2008
3 Trading Scenarios
Now that we have looked at some stocks that might be good candidates for covered call strategies, lets think about how we trade covered calls day to day. The three basic reasons that people use strategies such as covered calls. The first is to increase the rate of return on current stock investments and give some downside protection with the generated call premiums. The second is to generate longer term wealth accural, such as an IRA. The third is to generate monthly income. Over the next three days we will discuss options on how to best trade for each of these scenarios.
In the first scenario you can write options on stocks that you have owned for a length time. Generally they are blue chips. Writing covered calls on these is not going to generate a tremendous return, but if your goal is to hold blue chip stocks for long term gains you can add 8-10% per year. The key is remembering what the goal of this and each of the three strategies is. In this case, the goal is long term appreciation of the stock. You will have to determine option premium versus stock price increase versus short term trend for the stock price.
Lets take Wal-Mart as an example. As of close on friday the stock was at 49.44. The short term outlook for the stock is bullish (above 50 day moving avg, relative strength indicator is rising). The 50 march option is at 1.40. The 52.50 is going off at 0.55. If you think of the options premium at an addition to the strike price of the option, in this case 50 +1.40 =51.40. So if you don't think the stock is going above that with the next 30 days, it would be best to sell the 50 option. You would get the stock increase up to the strike price, 50 in this case. Using the 52.50 option, your defining price would be at 53.05.
The other benefit to consider is the average price of the stock. In the 50 option scenario, it is 49.44 - 1.40 = 48.04. The average price that you have in the stock is 48.04. If you are in the market to hold blue chip stocks for lock term appreciation this can be very important. In overall bear markets, if you hold the stocks until the market turns around, you can lower your average price and increase your profit long term.
Covered calls can be a nice addition to this type of portfolio. It will take a little analysis to understand when to write that closet option versus a farther out option. It will take a little more work, but it will be worth it. Tomorrow we will talk about scenario number 2.
Talk to you tomorrow.
In the first scenario you can write options on stocks that you have owned for a length time. Generally they are blue chips. Writing covered calls on these is not going to generate a tremendous return, but if your goal is to hold blue chip stocks for long term gains you can add 8-10% per year. The key is remembering what the goal of this and each of the three strategies is. In this case, the goal is long term appreciation of the stock. You will have to determine option premium versus stock price increase versus short term trend for the stock price.
Lets take Wal-Mart as an example. As of close on friday the stock was at 49.44. The short term outlook for the stock is bullish (above 50 day moving avg, relative strength indicator is rising). The 50 march option is at 1.40. The 52.50 is going off at 0.55. If you think of the options premium at an addition to the strike price of the option, in this case 50 +1.40 =51.40. So if you don't think the stock is going above that with the next 30 days, it would be best to sell the 50 option. You would get the stock increase up to the strike price, 50 in this case. Using the 52.50 option, your defining price would be at 53.05.
The other benefit to consider is the average price of the stock. In the 50 option scenario, it is 49.44 - 1.40 = 48.04. The average price that you have in the stock is 48.04. If you are in the market to hold blue chip stocks for lock term appreciation this can be very important. In overall bear markets, if you hold the stocks until the market turns around, you can lower your average price and increase your profit long term.
Covered calls can be a nice addition to this type of portfolio. It will take a little analysis to understand when to write that closet option versus a farther out option. It will take a little more work, but it will be worth it. Tomorrow we will talk about scenario number 2.
Talk to you tomorrow.
Wednesday, February 13, 2008
SulphCo. Inc
Today's stock that we are going to talk about is a little different. There is not a lot of fundamental history to talk about with Sulphco, but they have patented a sonar "cracking" or breaking down of heavy crude oil. The world is not running out of oil. It is running out of nice light easy to refine oil. As more and more crude oil that is newly discovered is a heavier oil, it requires more refining. There are much fewer in the world that can refine heavy crude. Sulphco just signed there first contract to use their process. Investing carries risk. Please do not invest money you cannot afford to loose.
SulphCo. Inc. is a developmental stage company, engaged in the development and commercialization of technology for the upgrading of crude oil. The company's Sonocracking process is based upon the use of ultrasonics that include the application of energy and frequency sound waves, which alters the molecular structure of crude oil, decreases the relative density and the viscosity of crude oil, and increases the amount of lighter oils that can be recovered during the refinery processes.
This technology also reduces the weight percentage of sulfur and parts per million of nitrogen in the chemical composition of crude oil. The company serves crude oil producers and refiners. SulphCo has a collaboration agreement with ChevronTexaco Energy Technology Company and a joint venture with Trans Gulf Petroleum Co. to implement SulphCo's Sonocracking desulfurization technology.
SUF Investor Highlights
Announced that it has signed an agreement with Pt. Isis Megah ("Isis"), an Indonesian oil and gas services company, which grants Isis an exclusive distributorship in the sales territories of India, Malaysia, Singapore and Indonesia.
Announced its first customer order, procured through Isis, for Sonocracking units with at least thirty thousand barrels per day of processing capacity.
Reported results from the first and second rounds of testing in Europe. Two sets of testing programs were completed with minimal operating issues and the appropriate analyses have now been completed.
Reported that the interest level in the Sonocracking process remains high as potential customers see the value that can be driven by the technology.
Trades:
Covered Call
But stock @ 4.51
Sell March 5 call @ 0.55
12.2% return in 36 days
Hedge Wrap
Buy stock @ 4.51
Sell March 5 call @ 0.55
Buy March 2.50 put @ 0.05
11% return in 36 days
Talk to you next week.
SulphCo. Inc. is a developmental stage company, engaged in the development and commercialization of technology for the upgrading of crude oil. The company's Sonocracking process is based upon the use of ultrasonics that include the application of energy and frequency sound waves, which alters the molecular structure of crude oil, decreases the relative density and the viscosity of crude oil, and increases the amount of lighter oils that can be recovered during the refinery processes.
This technology also reduces the weight percentage of sulfur and parts per million of nitrogen in the chemical composition of crude oil. The company serves crude oil producers and refiners. SulphCo has a collaboration agreement with ChevronTexaco Energy Technology Company and a joint venture with Trans Gulf Petroleum Co. to implement SulphCo's Sonocracking desulfurization technology.
SUF Investor Highlights
Announced that it has signed an agreement with Pt. Isis Megah ("Isis"), an Indonesian oil and gas services company, which grants Isis an exclusive distributorship in the sales territories of India, Malaysia, Singapore and Indonesia.
Announced its first customer order, procured through Isis, for Sonocracking units with at least thirty thousand barrels per day of processing capacity.
Reported results from the first and second rounds of testing in Europe. Two sets of testing programs were completed with minimal operating issues and the appropriate analyses have now been completed.
Reported that the interest level in the Sonocracking process remains high as potential customers see the value that can be driven by the technology.
Trades:
Covered Call
But stock @ 4.51
Sell March 5 call @ 0.55
12.2% return in 36 days
Hedge Wrap
Buy stock @ 4.51
Sell March 5 call @ 0.55
Buy March 2.50 put @ 0.05
11% return in 36 days
Talk to you next week.
Xinhua Finance Media Limited
This stock is another Chinese company. The fundamentals do not look that great, but the chart and the analyst recommendations look positive. As we have stated before, when using foreign based stocks for a covered call, we strongly recommend the hedge wrap strategy due to an increased volitilty level. All investing carries risk. Please do not invest money you cannot afford to loose.
Xinhua Finance Media Limited (XFM) is a diversified media company in China. XFM has developed an integrated platform that includes the creation and production of content that is distributed across nationwide television and print media outlets, and radio in Beijing and Shanghai. XFMGÇÖs business operates across five groups: media production, broadcasting, print, advertising and research. Beijing Taide Advertising Co., Ltd. (Beijing Taide), an affiliated entity, XFM acquired 50% of Beijing Jingguan Xincheng Advertising Co., Ltd., or Economic Observer Advertising. In June 2007, it acquired Singshine (Holdings) Hongkong Limited and Beijing Mobile Interactive Co., Ltd. On July 2, 2007, the Company acquired the entire stake in a Virgin Islands-based company, which holds 100% stake in Convey Advertising Company Limited, a Hong Kong-based company. In November 2007, the Company acquired JCBN Company Limited, an advertising company with operations in Shanghai, Beijing and Hong Kong.
Xinhua Finance Media Ltd: Stock Rating Summary
3
Xinhua Finance Media Ltd, a micro-cap company in the consumer services sector, is expected to underperform the market over the next six months with above average risk.
FundamentalGrade: D
• The most recent quarterly earnings report was slightly lower than analysts’ consensus forecast. Neutral/Negative
• Earnings growth information is unavailable or inconsistent.
• Earnings estimate revision information is unavailable or inconsistent.
OwnershipGrade: C
• Insider trading information is unavailable or inconsistent.
• Shares are neither being accumulated heavily nor sold heavily by financial institutions. Neutral for a small company like XFML
ValuationGrade: C
• The price-to-earnings multiple is lower than average for all stocks in the StockScouter universe. Positive
• Price-to-sales information is unavailable or inconsistent.
• The ratio of XFML's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: NA
• Relative strength information is unavailable or inconsistent.
• Moving average information is unavailable or inconsistent.
Average brokerage recommendation is Strong Buy.
Trades:
Covered calls
Buy stock @ 4.88
Sell March 5 call @ 0.65
13.3% return in 37 days
Hedge Wrap
Buy stock @ 4.88
Sell March 5 call @ 0.65
Buy March 2.50 put @ 0.10
11.3% return in 37 days
Talk to you tomorrow.
Xinhua Finance Media Limited (XFM) is a diversified media company in China. XFM has developed an integrated platform that includes the creation and production of content that is distributed across nationwide television and print media outlets, and radio in Beijing and Shanghai. XFMGÇÖs business operates across five groups: media production, broadcasting, print, advertising and research. Beijing Taide Advertising Co., Ltd. (Beijing Taide), an affiliated entity, XFM acquired 50% of Beijing Jingguan Xincheng Advertising Co., Ltd., or Economic Observer Advertising. In June 2007, it acquired Singshine (Holdings) Hongkong Limited and Beijing Mobile Interactive Co., Ltd. On July 2, 2007, the Company acquired the entire stake in a Virgin Islands-based company, which holds 100% stake in Convey Advertising Company Limited, a Hong Kong-based company. In November 2007, the Company acquired JCBN Company Limited, an advertising company with operations in Shanghai, Beijing and Hong Kong.
Xinhua Finance Media Ltd: Stock Rating Summary
3
Xinhua Finance Media Ltd, a micro-cap company in the consumer services sector, is expected to underperform the market over the next six months with above average risk.
FundamentalGrade: D
• The most recent quarterly earnings report was slightly lower than analysts’ consensus forecast. Neutral/Negative
• Earnings growth information is unavailable or inconsistent.
• Earnings estimate revision information is unavailable or inconsistent.
OwnershipGrade: C
• Insider trading information is unavailable or inconsistent.
• Shares are neither being accumulated heavily nor sold heavily by financial institutions. Neutral for a small company like XFML
ValuationGrade: C
• The price-to-earnings multiple is lower than average for all stocks in the StockScouter universe. Positive
• Price-to-sales information is unavailable or inconsistent.
• The ratio of XFML's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: NA
• Relative strength information is unavailable or inconsistent.
• Moving average information is unavailable or inconsistent.
Average brokerage recommendation is Strong Buy.
Trades:
Covered calls
Buy stock @ 4.88
Sell March 5 call @ 0.65
13.3% return in 37 days
Hedge Wrap
Buy stock @ 4.88
Sell March 5 call @ 0.65
Buy March 2.50 put @ 0.10
11.3% return in 37 days
Talk to you tomorrow.
Tuesday, February 12, 2008
Vanda Pharmaceuticals Inc.
Well we are looking at yet another small pharma company, These companies are fairly immune to economic slowdowns, therefore a large number of investors are wanting to buy call options. This results in driving up the price on the options we want to sell. The thing to keep in mind is that these stock prices are very Susceptible to FDA rulings on their drugs as they go through trials. All types of investing carry risk. Please do not invest money you cannot afford to loose.
Vanda Pharmaceuticals Inc. (Vanda) is a biopharmaceutical company focused on the development and commercialization of clinical-stage drug candidates, with exclusive worldwide commercial rights to three product candidates in clinical development for various central nervous system disorders. VandaGÇÖs lead product candidate, iloperidone, is a compound for the treatment of schizophrenia and bipolar disorder. Its second product candidate, VEC-162, is a compound for the treatment of sleep and mood disorders. In November 2006, Vanda announced positive top-line results from its Phase III trial of VEC-162 in transient insomnia. VEC-162 demonstrated significant improvement in several parameters used to measure the efficacy of insomnia therapies, including reduced duration of wake after sleep onset, improved sleep efficiency and shortened time to persistent sleep. VandaGÇÖs third product candidate, VSF-173, is a compound for the treatment of excessive sleepiness and is ready for a Phase II trial.
Vanda Pharmaceuticals Inc: Stock Rating Summary
5
Vanda Pharmaceuticals Inc, a small-cap company in the health care sector, is expected to match the market over the next six months with above average risk.
10 is the best possible rating.
FundamentalGrade: B
•The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. Positive
•Earnings growth information is unavailable or inconsistent.
•Earnings estimate revision information is unavailable or inconsistent.
OwnershipGrade: C
•Insider trading information is unavailable or inconsistent.
•Shares are under heavy accumulation by financial institutions. Positive for a small company like VNDA
ValuationGrade: D
•The price-to-earnings multiple is a negative number. No effect
•Price-to-sales information is unavailable or inconsistent.
•The ratio of VNDA's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: F
•The StockScouter measure of relative price change and consistency is very low. Very negative
•Previous day’s closing price for VNDA was significantly below its 50-day moving average, a level from which prices frequently rebound over the long term. Positive
Average brokerage recommendation is Moderate Buy.
Trades:
Covered call
Buy stock @ 4.91
Sell March 5 covered call @ 0.70
14.3% return in 38 days
Hedge Wrap
Buy stock @ 4.91
Sell March 5 covered call @ 0.70
Buy March 2.50 put @ 0.10
12.3% return in 38 days
Talk to you tomorrow.
Vanda Pharmaceuticals Inc. (Vanda) is a biopharmaceutical company focused on the development and commercialization of clinical-stage drug candidates, with exclusive worldwide commercial rights to three product candidates in clinical development for various central nervous system disorders. VandaGÇÖs lead product candidate, iloperidone, is a compound for the treatment of schizophrenia and bipolar disorder. Its second product candidate, VEC-162, is a compound for the treatment of sleep and mood disorders. In November 2006, Vanda announced positive top-line results from its Phase III trial of VEC-162 in transient insomnia. VEC-162 demonstrated significant improvement in several parameters used to measure the efficacy of insomnia therapies, including reduced duration of wake after sleep onset, improved sleep efficiency and shortened time to persistent sleep. VandaGÇÖs third product candidate, VSF-173, is a compound for the treatment of excessive sleepiness and is ready for a Phase II trial.
Vanda Pharmaceuticals Inc: Stock Rating Summary
5
Vanda Pharmaceuticals Inc, a small-cap company in the health care sector, is expected to match the market over the next six months with above average risk.
10 is the best possible rating.
FundamentalGrade: B
•The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. Positive
•Earnings growth information is unavailable or inconsistent.
•Earnings estimate revision information is unavailable or inconsistent.
OwnershipGrade: C
•Insider trading information is unavailable or inconsistent.
•Shares are under heavy accumulation by financial institutions. Positive for a small company like VNDA
ValuationGrade: D
•The price-to-earnings multiple is a negative number. No effect
•Price-to-sales information is unavailable or inconsistent.
•The ratio of VNDA's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: F
•The StockScouter measure of relative price change and consistency is very low. Very negative
•Previous day’s closing price for VNDA was significantly below its 50-day moving average, a level from which prices frequently rebound over the long term. Positive
Average brokerage recommendation is Moderate Buy.
Trades:
Covered call
Buy stock @ 4.91
Sell March 5 covered call @ 0.70
14.3% return in 38 days
Hedge Wrap
Buy stock @ 4.91
Sell March 5 covered call @ 0.70
Buy March 2.50 put @ 0.10
12.3% return in 38 days
Talk to you tomorrow.
Monday, February 11, 2008
Cardiome Pharma Corp
Well here is the next stock we want to look at. Cardiome pharma corp is another small pharma company that has a good up side for a covered call strategy. First a quick update on the bond insurers that we discussed last week. It is looking more optomistic that a deal will get done for MBIA and Ambac so they can retain their AAA rating. It is not yet a done deal, but the chances are looking better than last week. All investing has risk. Please do not invest money that you cannot loose.
Cardiome Pharma Corp. (Cardiome) is a drug research and development company focused on developing drugs to treat or prevent cardiovascular diseases. The Company has four wholly owned subsidiaries: Rhythm-Search Developments Ltd.; Cardiome, Inc.; Cardiome Research and Development (Barbados), Inc., and Artesian Therapeutics, Inc. Vernakalant intravenous (iv) is in ongoing Phase III clinical and safety testing and Vernakalant (oral) is in Phase II clinical testing. The Artesian small molecule drug candidates are in pre-clinical testing.
CARDIOME PHARMA CORP: Stock Rating Summary
7
CARDIOME PHARMA CORP, a small-cap growth company in the health care sector, is expected to outperform the market over the next six months with very low risk.
10 is the best possible rating.
FundamentalGrade: NA
• The most recent quarterly earnings information is unavailable or inconsistent.
• Earnings growth information is unavailable or inconsistent.
• Earnings estimate revision information is unavailable or inconsistent.
OwnershipGrade: C
•Insider trading information is unavailable or inconsistent.
•Shares are being heavily sold by financial institutions. Neutral for a small company like CRME
ValuationGrade: B
•The price-to-earnings multiple is a negative number. No effect
•The price-to-sales multiple is significantly higher than the average for all stocks in the StockScouter universe. Negative for a small company like CRME
•The ratio of CRME's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: C
•The StockScouter measure of relative price change and consistency is low. Negative
•Previous day’s closing price for CRME was significantly below its 50-day moving average, a level from which prices frequently rebound over the long term. Positive
Average brokerage recommendation is Moderate Buy.
Strategies:
Covered Call
Buy stock @ 6.02
Sell March 7.50 call @ 1.10
18.3% return in 39 days
Hedge Wrap
Buy stock @ 6.02
Sell March 7.50 call @ 1.10
Buy March 2.50 put @ 0.15
15.8% return in 39 days*
* - the March 5 put is selling at 0.95. That does not give much room between the call and the put. We will look at a covered call only or the 2.50 put if we want downside protection.
Talk to you tomorrow.
Cardiome Pharma Corp. (Cardiome) is a drug research and development company focused on developing drugs to treat or prevent cardiovascular diseases. The Company has four wholly owned subsidiaries: Rhythm-Search Developments Ltd.; Cardiome, Inc.; Cardiome Research and Development (Barbados), Inc., and Artesian Therapeutics, Inc. Vernakalant intravenous (iv) is in ongoing Phase III clinical and safety testing and Vernakalant (oral) is in Phase II clinical testing. The Artesian small molecule drug candidates are in pre-clinical testing.
CARDIOME PHARMA CORP: Stock Rating Summary
7
CARDIOME PHARMA CORP, a small-cap growth company in the health care sector, is expected to outperform the market over the next six months with very low risk.
10 is the best possible rating.
FundamentalGrade: NA
• The most recent quarterly earnings information is unavailable or inconsistent.
• Earnings growth information is unavailable or inconsistent.
• Earnings estimate revision information is unavailable or inconsistent.
OwnershipGrade: C
•Insider trading information is unavailable or inconsistent.
•Shares are being heavily sold by financial institutions. Neutral for a small company like CRME
ValuationGrade: B
•The price-to-earnings multiple is a negative number. No effect
•The price-to-sales multiple is significantly higher than the average for all stocks in the StockScouter universe. Negative for a small company like CRME
•The ratio of CRME's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: C
•The StockScouter measure of relative price change and consistency is low. Negative
•Previous day’s closing price for CRME was significantly below its 50-day moving average, a level from which prices frequently rebound over the long term. Positive
Average brokerage recommendation is Moderate Buy.
Strategies:
Covered Call
Buy stock @ 6.02
Sell March 7.50 call @ 1.10
18.3% return in 39 days
Hedge Wrap
Buy stock @ 6.02
Sell March 7.50 call @ 1.10
Buy March 2.50 put @ 0.15
15.8% return in 39 days*
* - the March 5 put is selling at 0.95. That does not give much room between the call and the put. We will look at a covered call only or the 2.50 put if we want downside protection.
Talk to you tomorrow.
Saturday, February 9, 2008
Medis Technologies Ltd
Well it is time to start another week in the markets. Medis Technologies Limited is the next stock that we are looking at for a covered call play. We must again advise caution this week because of potential market volitility. Investing always brings risk. Never invest money you cannot afford to loose.
Medis Technologies Ltd. (MTL) is a holding company, which through its wholly owned subsidiaries, Medis El Ltd., More Energy Ltd. and Cell Kinetics Ltd., designs, develops and markets liquid fuel cell products principally for the mobile handset and portable consumer electronics markets. The CompanyGÇÖs 24/7 Power Pack is a small disposable power source capable of providing direct power or multiple recharges to many portable electronic devices, such as mobile handsets, smart phones, Moving Picture Experts Group Layer-3 audio (MP3) players, gaming and other handheld electronic devices. During the year ended December 31, 2006, MTL produced over 7,000 24/7 Power Packs for testing, marketing and promotional purposes, of which it distributed in excess of 1,000 to personnel of mobile network operators, original equipment manufacturers (OEMs), software providers, retail customers, advertising executives, content providers and others worldwide.
Medis Technologies Ltd: Stock Rating Summary
5
Medis Technologies Ltd, a small-cap company in the technology sector, is expected to outperform the market over the next six months with above average risk.
10 is the best possible rating.
FundamentalGrade: D
• The most recent quarterly earnings report was approximately equal to or higher than analysts’ consensus forecast, but not to a degree that is predictive of future returns. Neutral
• Earnings growth in the past year has decelerated moderately compared to earnings growth in the past three years. Negative
• Earnings estimate revision information is unavailable or inconsistent.
OwnershipGrade: C
• Insider trading information is unavailable or inconsistent.
• Shares are under heavy accumulation by financial institutions. Positive for a small company like MDTL
ValuationGrade: D
• The price-to-earnings multiple is a negative number. No effect
• Price-to-sales information is unavailable or inconsistent.
• The ratio of MDTL's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: A
• The StockScouter measure of relative price change and consistency is high. Positive
• Previous day’s closing price for MDTL was significantly below its 50-day moving average, a level from which prices frequently rebound over the long term. Positive
Average brokerage recommendation is Hold.
Covered Call:
Purchase stock at $9.87
Sell March 10 call at 1.50
15.2% return in 40 days
Hedge Wrap:
Purchase stock at $9.87
Sell March 10 call at 1.50
Purchase March 7.50 call at 0.50
10.1% return in 40 days
Talk to you tomorrow.
Medis Technologies Ltd. (MTL) is a holding company, which through its wholly owned subsidiaries, Medis El Ltd., More Energy Ltd. and Cell Kinetics Ltd., designs, develops and markets liquid fuel cell products principally for the mobile handset and portable consumer electronics markets. The CompanyGÇÖs 24/7 Power Pack is a small disposable power source capable of providing direct power or multiple recharges to many portable electronic devices, such as mobile handsets, smart phones, Moving Picture Experts Group Layer-3 audio (MP3) players, gaming and other handheld electronic devices. During the year ended December 31, 2006, MTL produced over 7,000 24/7 Power Packs for testing, marketing and promotional purposes, of which it distributed in excess of 1,000 to personnel of mobile network operators, original equipment manufacturers (OEMs), software providers, retail customers, advertising executives, content providers and others worldwide.
Medis Technologies Ltd: Stock Rating Summary
5
Medis Technologies Ltd, a small-cap company in the technology sector, is expected to outperform the market over the next six months with above average risk.
10 is the best possible rating.
FundamentalGrade: D
• The most recent quarterly earnings report was approximately equal to or higher than analysts’ consensus forecast, but not to a degree that is predictive of future returns. Neutral
• Earnings growth in the past year has decelerated moderately compared to earnings growth in the past three years. Negative
• Earnings estimate revision information is unavailable or inconsistent.
OwnershipGrade: C
• Insider trading information is unavailable or inconsistent.
• Shares are under heavy accumulation by financial institutions. Positive for a small company like MDTL
ValuationGrade: D
• The price-to-earnings multiple is a negative number. No effect
• Price-to-sales information is unavailable or inconsistent.
• The ratio of MDTL's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: A
• The StockScouter measure of relative price change and consistency is high. Positive
• Previous day’s closing price for MDTL was significantly below its 50-day moving average, a level from which prices frequently rebound over the long term. Positive
Average brokerage recommendation is Hold.
Covered Call:
Purchase stock at $9.87
Sell March 10 call at 1.50
15.2% return in 40 days
Hedge Wrap:
Purchase stock at $9.87
Sell March 10 call at 1.50
Purchase March 7.50 call at 0.50
10.1% return in 40 days
Talk to you tomorrow.
Thursday, February 7, 2008
E House China Holdings Ltd
This is a stock that we are looking to add to our covered call portfolio. The thing to remember about China stocks is that there is a greater volitility involved. They can be good covered call candidates, however we choose to always use the hedge wrap on China/foreign stocks to guard against increased volitility. The financial fundamentals do not look as strong for this stock as the previous stocks we have talked about, but it has a strong recommendation from several analyst and looks to be a good candidate as a hedge wrap. There is always a risk associated with investing. Please do not invest money that you cannot afford to loose.
E-House (China) Holdings Limited (E-House), through its subsidiaries, is engaged in providing real estate agency and brokerage services in the primary and secondary markets and real estate consulting and information services in the PeopleGÇÖs Republic of China. The Company sold an aggregate of approximately five million square meters of primary properties. It operates through a network of over 1,800 real estate sales professionals in 20 cities throughout China. E-HouseGÇÖs service offerings are enhanced by its real estate information database and analysis system, which the Company refers to as China Real Estate Information Circle system (CRIC system), which is an information system that provides up-to-date and in-depth information covering residential and commercial real estate properties in all regions in China. It provides three principal types of services: primary real estate agency services, secondary real estate brokerage services, and real estate consulting and information services.
E House China Holdings Ltd: Stock Rating Detail
3
The grades below summarize the effects of key business and trading trends on this stock. FundamentalGrade: B
• The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. Positive
• Earnings growth information is unavailable or inconsistent.
• Earnings estimate revision information is unavailable or inconsistent.
OwnershipGrade: NA
• Insider trading information is unavailable or inconsistent.
• Institutional holdings information is unavailable or inconsistent.
ValuationGrade: F
• The price-to-earnings multiple is higher than the average for all stocks in the StockScouter universe. Negative
• Price-to-sales information is unavailable or inconsistent.
• The ratio of EJ's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
E House China Holdings Ltd: Analyst Ratings
Average brokerage recommendation is Strong Buy.
Trades:
Purchase stock at $16.60
Sell March call at 2.25
13.5% return in 43 days
Hedge Wrap
Same as above plus buy March put at 12.50
7.5% return in 43 days
Good investing!
E-House (China) Holdings Limited (E-House), through its subsidiaries, is engaged in providing real estate agency and brokerage services in the primary and secondary markets and real estate consulting and information services in the PeopleGÇÖs Republic of China. The Company sold an aggregate of approximately five million square meters of primary properties. It operates through a network of over 1,800 real estate sales professionals in 20 cities throughout China. E-HouseGÇÖs service offerings are enhanced by its real estate information database and analysis system, which the Company refers to as China Real Estate Information Circle system (CRIC system), which is an information system that provides up-to-date and in-depth information covering residential and commercial real estate properties in all regions in China. It provides three principal types of services: primary real estate agency services, secondary real estate brokerage services, and real estate consulting and information services.
E House China Holdings Ltd: Stock Rating Detail
3
The grades below summarize the effects of key business and trading trends on this stock. FundamentalGrade: B
• The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. Positive
• Earnings growth information is unavailable or inconsistent.
• Earnings estimate revision information is unavailable or inconsistent.
OwnershipGrade: NA
• Insider trading information is unavailable or inconsistent.
• Institutional holdings information is unavailable or inconsistent.
ValuationGrade: F
• The price-to-earnings multiple is higher than the average for all stocks in the StockScouter universe. Negative
• Price-to-sales information is unavailable or inconsistent.
• The ratio of EJ's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
E House China Holdings Ltd: Analyst Ratings
Average brokerage recommendation is Strong Buy.
Trades:
Purchase stock at $16.60
Sell March call at 2.25
13.5% return in 43 days
Hedge Wrap
Same as above plus buy March put at 12.50
7.5% return in 43 days
Good investing!
Wednesday, February 6, 2008
Arena Pharmaceuticals
Arena pharmaceuticals is a stock that we are looking to add to our portfolio. Below is a brief description of the financial fundamentals for Arena, as well as some current analyst recommendations , and a brief description of the company. Before we get into that detail, we want to state that all trading carries with it a risk. Please do not risk any funds that you cannot afford to loose.
Arena Pharmaceuticals, Inc. (Arna) is a clinical-stage biopharmaceutical company focusing on the discovery, development and commercialization oral drugs in four therapeutic areas: cardiovascular, central nervous system, inflammatory and metabolic diseases. The CompanyGÇÖs advanced drug candidate, lorcaserin hydrochloride (lorcaserin), is being investigated in a Phase III clinical trial program for the treatment of obesity. It has a pipeline of compounds that target known and orphan G protein-coupled receptors (GPCRs), and includes compounds being evaluated independently and with its partners, Ortho-McNeil Pharmaceutical, Inc. and Merck & Co., Inc.ArenaGÇÖs other lead internal development programs include APD125 and APD791. During the year ended December 31, 2006, the Company initiated dosing in a Phase II clinical trial of APD125, which is an orally available drug candidate that it discovered and has the potential to reduce insomnia symptoms and improve sleep maintenance.
Arena Pharmaceuticals Inc: Stock Rating Detail
6 (10 being the best)
The grades below summarize the effects of key business and trading trends on this stock.
FundamentalGrade: B
• The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. Positive
• Earnings growth in the past year has decelerated rapidly compared to earnings growth in the past three years. Negative
• One or more analysts has modestly increased quarterly earnings estimates for ARNA. Positive
OwnershipGrade: C
• Insider trading information is unavailable or inconsistent.
• Shares are being heavily sold by financial institutions. Neutral for a small company like ARNA
ValuationGrade: B
• The price-to-earnings multiple is a negative number. No effect
• The price-to-sales multiple is significantly higher than the average for all stocks in the StockScouter universe. Negative for a small company like ARNA
• The ratio of ARNA's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: F
• The StockScouter measure of relative price change and consistency is very low. Very negative
• Previous day's closing price for ARNA was slightly below its 50-day moving average. Negative
Arena Pharmaceuticals Inc: Analyst Ratings
Average brokerage recommendation is Moderate Buy.
Our trades on this stock are as follows:
Purchase stock at $7.69
Sell 7.50 March call for 1.40
18.2 % in 44 days.
Purchase stock at $7.69
Sell above call
Buy 5 March put for 0.35
13.6% in 44 days.
Talk to you tomorrow.
Arena Pharmaceuticals, Inc. (Arna) is a clinical-stage biopharmaceutical company focusing on the discovery, development and commercialization oral drugs in four therapeutic areas: cardiovascular, central nervous system, inflammatory and metabolic diseases. The CompanyGÇÖs advanced drug candidate, lorcaserin hydrochloride (lorcaserin), is being investigated in a Phase III clinical trial program for the treatment of obesity. It has a pipeline of compounds that target known and orphan G protein-coupled receptors (GPCRs), and includes compounds being evaluated independently and with its partners, Ortho-McNeil Pharmaceutical, Inc. and Merck & Co., Inc.ArenaGÇÖs other lead internal development programs include APD125 and APD791. During the year ended December 31, 2006, the Company initiated dosing in a Phase II clinical trial of APD125, which is an orally available drug candidate that it discovered and has the potential to reduce insomnia symptoms and improve sleep maintenance.
Arena Pharmaceuticals Inc: Stock Rating Detail
6 (10 being the best)
The grades below summarize the effects of key business and trading trends on this stock.
FundamentalGrade: B
• The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast. Positive
• Earnings growth in the past year has decelerated rapidly compared to earnings growth in the past three years. Negative
• One or more analysts has modestly increased quarterly earnings estimates for ARNA. Positive
OwnershipGrade: C
• Insider trading information is unavailable or inconsistent.
• Shares are being heavily sold by financial institutions. Neutral for a small company like ARNA
ValuationGrade: B
• The price-to-earnings multiple is a negative number. No effect
• The price-to-sales multiple is significantly higher than the average for all stocks in the StockScouter universe. Negative for a small company like ARNA
• The ratio of ARNA's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: F
• The StockScouter measure of relative price change and consistency is very low. Very negative
• Previous day's closing price for ARNA was slightly below its 50-day moving average. Negative
Arena Pharmaceuticals Inc: Analyst Ratings
Average brokerage recommendation is Moderate Buy.
Our trades on this stock are as follows:
Purchase stock at $7.69
Sell 7.50 March call for 1.40
18.2 % in 44 days.
Purchase stock at $7.69
Sell above call
Buy 5 March put for 0.35
13.6% in 44 days.
Talk to you tomorrow.
Tuesday, February 5, 2008
Progenics Pharmaceuticals (PGNX)
Well finally we get to talk about individual stocks. Progenics pharmaceuticals is a stock that currently we have in our covered call portfolio. Below is a brief description of the financial fundamentals for Progenics, as well as some current analyst recommendations , and a brief description of the company. Before we get into that detail, we want to state that all trading carries with it a risk. Please do not risk any funds that you cannot afford to loose.
Progenics Pharmaceuticals, Inc. (Progenics) is a biopharmaceutical company focusing on the development and commercialization of therapeutic products to treat the unmet medical needs of patients with debilitating conditions and life-threatening diseases. Its principal programs are directed toward gastroenterology, virology and oncology. In the area of gastroenterology, ProgenicsGÇÖ work is focused on methylnaltrexone, which is its most advanced product candidate. In the area of virology, the Company is developing viral-entry inhibitors. Progenics is developing immunotherapies for prostate cancer, including monoclonal antibodies directed against prostate specific membrane antigen (PSMA), a protein found on the surface of prostate cancer cells. Its PSMA programs are conducted through PSMA Development Company LLC (PSMA LLC). On April 20, 2006, the Company acquired Cytogen CorporationGÇÖs 50% membership interest in PSMA LLC. As a result, PSMA LLC became a wholly owned subsidiary of Progenics.
Progenics Pharmaceuticals Inc: Stock Rating Detail
6 (10 being the best)
The grades below summarize the effects of key business and trading trends on this stock.
FundamentalGrade: D
•The most recent quarterly earnings report was significantly lower than analysts' consensus forecast. Negative
•Earnings growth in the past year has accelerated moderately compared to earnings growth in the past three years. Positive
•One or more analysts has modestly decreased quarterly earnings estimates for PGNX. Negative
OwnershipGrade: C
•An executive, director or major shareholder sold a small number of shares recently. Neutral
•Shares are under heavy accumulation by financial institutions. Positive for a small company like PGNX
ValuationGrade: B
•The price-to-earnings multiple is a negative number. No effect
•The price-to-sales multiple is significantly higher than the average for all stocks in the StockScouter universe. Negative for a small company like PGNX
•The ratio of PGNX's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: D
•The StockScouter measure of relative price change and consistency is low. Negative
•Previous day's closing price for PGNX was slightly below its 50-day moving average. Negative
Progenics Pharmaceuticals Inc: Analyst Ratings
Average brokerage recommendation is Moderate Buy.
Our current play is a stock purchase at 16.55. While selling a 17.50 option for 3.50. That gives you a return of 21.1%. If you want to do a hedge wrapper then add a purchase of a 12.50 put to net out to a 10.9% return. These are for the March options that will expire 45 days from today.
Tomorrow we will look at another good potential covered call stock.
Progenics Pharmaceuticals, Inc. (Progenics) is a biopharmaceutical company focusing on the development and commercialization of therapeutic products to treat the unmet medical needs of patients with debilitating conditions and life-threatening diseases. Its principal programs are directed toward gastroenterology, virology and oncology. In the area of gastroenterology, ProgenicsGÇÖ work is focused on methylnaltrexone, which is its most advanced product candidate. In the area of virology, the Company is developing viral-entry inhibitors. Progenics is developing immunotherapies for prostate cancer, including monoclonal antibodies directed against prostate specific membrane antigen (PSMA), a protein found on the surface of prostate cancer cells. Its PSMA programs are conducted through PSMA Development Company LLC (PSMA LLC). On April 20, 2006, the Company acquired Cytogen CorporationGÇÖs 50% membership interest in PSMA LLC. As a result, PSMA LLC became a wholly owned subsidiary of Progenics.
Progenics Pharmaceuticals Inc: Stock Rating Detail
6 (10 being the best)
The grades below summarize the effects of key business and trading trends on this stock.
FundamentalGrade: D
•The most recent quarterly earnings report was significantly lower than analysts' consensus forecast. Negative
•Earnings growth in the past year has accelerated moderately compared to earnings growth in the past three years. Positive
•One or more analysts has modestly decreased quarterly earnings estimates for PGNX. Negative
OwnershipGrade: C
•An executive, director or major shareholder sold a small number of shares recently. Neutral
•Shares are under heavy accumulation by financial institutions. Positive for a small company like PGNX
ValuationGrade: B
•The price-to-earnings multiple is a negative number. No effect
•The price-to-sales multiple is significantly higher than the average for all stocks in the StockScouter universe. Negative for a small company like PGNX
•The ratio of PGNX's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.
TechnicalGrade: D
•The StockScouter measure of relative price change and consistency is low. Negative
•Previous day's closing price for PGNX was slightly below its 50-day moving average. Negative
Progenics Pharmaceuticals Inc: Analyst Ratings
Average brokerage recommendation is Moderate Buy.
Our current play is a stock purchase at 16.55. While selling a 17.50 option for 3.50. That gives you a return of 21.1%. If you want to do a hedge wrapper then add a purchase of a 12.50 put to net out to a 10.9% return. These are for the March options that will expire 45 days from today.
Tomorrow we will look at another good potential covered call stock.
Monday, February 4, 2008
Get Ready, Get Set, don't Go!
We told you yesterday that we would start providing individual stock data. We will start that tomorrow, but first a discussion about the current state of the markets.
We very strongly believe in our free market economy, the American economy, and the American people. This makes us always long-term bullish on the American markets. This does not mean that we can bury our heads in the sand when short-term macro economic factors occur. We will always believe that if you are invested for the long-term, then you should "ride out" the short-term down trends and remain focused on the long-term goal. Now having said that, we would suggest not buying stocks for the covered call strategy for the next 2 weeks unless you are going to buy the stock to hold for the long-term, you already own the stock and want to write calls to increase your yield, or you want to use the hedge wrapper strategy to protect your downside risk.
Why 2 weeks you ask? In the next 2 weeks we will learn "if" the other shoe to the subprime mortgage issue will drop. There are 2 companies that insure a large portion of the bonds issued in this country. They are Ambac and MBIA. These companies insure bonds that a large number of financial institutions "have on their books". Ambac and MBIA are rated by the rating services (predominately Moody's) as AAA. By insuring bonds, they lend their triple A rating to those bonds. That triple A rating carries with it a certain value. The higher the rating the higher the value of the bond, which companies that own these bonds consider as an asset and are valued on their balance sheet based on that rating. With the recent fallout from the subprime issue it is widely believed that Ambac and MBIA do not have the necessary capital to retain their triple A rating.
There are groups of banks and private investors that are currently trying to put together deals that would get these companies enough capital to retain their triple A rating. If Ambac and MBIA loose their rating, the above mentioned bonds will also loose their rating and some of their value. If that happens companies that have these bonds will have to take a "write down" on the bonds lost value. While it is important to remember that this does not represent an actual cash loss, it does represent a revaluation of an asset to a lower value. If this happens it will more than likely cause the stock market to drop in the short-term.
Moody's has stated they will re-evaluate the ratings in 2 weeks. It is our opinion that the necessary deals will get done so these companies can retain their ratings, but this will drive a large amount of volitility in the next couple of weeks.
Now tomorrow we will start discussing individual stocks.
We very strongly believe in our free market economy, the American economy, and the American people. This makes us always long-term bullish on the American markets. This does not mean that we can bury our heads in the sand when short-term macro economic factors occur. We will always believe that if you are invested for the long-term, then you should "ride out" the short-term down trends and remain focused on the long-term goal. Now having said that, we would suggest not buying stocks for the covered call strategy for the next 2 weeks unless you are going to buy the stock to hold for the long-term, you already own the stock and want to write calls to increase your yield, or you want to use the hedge wrapper strategy to protect your downside risk.
Why 2 weeks you ask? In the next 2 weeks we will learn "if" the other shoe to the subprime mortgage issue will drop. There are 2 companies that insure a large portion of the bonds issued in this country. They are Ambac and MBIA. These companies insure bonds that a large number of financial institutions "have on their books". Ambac and MBIA are rated by the rating services (predominately Moody's) as AAA. By insuring bonds, they lend their triple A rating to those bonds. That triple A rating carries with it a certain value. The higher the rating the higher the value of the bond, which companies that own these bonds consider as an asset and are valued on their balance sheet based on that rating. With the recent fallout from the subprime issue it is widely believed that Ambac and MBIA do not have the necessary capital to retain their triple A rating.
There are groups of banks and private investors that are currently trying to put together deals that would get these companies enough capital to retain their triple A rating. If Ambac and MBIA loose their rating, the above mentioned bonds will also loose their rating and some of their value. If that happens companies that have these bonds will have to take a "write down" on the bonds lost value. While it is important to remember that this does not represent an actual cash loss, it does represent a revaluation of an asset to a lower value. If this happens it will more than likely cause the stock market to drop in the short-term.
Moody's has stated they will re-evaluate the ratings in 2 weeks. It is our opinion that the necessary deals will get done so these companies can retain their ratings, but this will drive a large amount of volitility in the next couple of weeks.
Now tomorrow we will start discussing individual stocks.
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