The market close pricing on the market and volatility at the time of the analysis was:
S&P 500 1,318
VIX 18.57
Apologies for the odd order of the stocks, not sure why the program scrambled the individual stock sheets. Also there are several errors due to stale data that mostly effects DE and any w/o div notes.
We remain cautious in this market and have a significant portion of our portfolio in cash. January's option expiration resulted in most of our covered positions being called. Therefore, our income potential has been brought to near zero. The result is a need to buy "income". We are doing this by establishing new positions in select stocks that have what we believe to have the highest dividend yields with stable profiles. The risk is market beta. In order to manage this risk we are buying stocks that are near their dividend pay dates. This creates the need for additional risk/reward analysis. We must analyze and determine the break even between selling in the money calls to the dividend earned. This additional step is necessary to determine the best way to capture the dividend versus a large premium that may not compensate us enough if the stock is called prior to ex-date.
ABB ABB Ltd - Mid RSI's, nice profile overall
ADM Archer-Daniels-Midland Company - #1 overall in group(the w/o div number is wrong) - mid RSI's, div date mid Feb, look to sell the March 30's expecting to get called for the 17¢ div
ADP Automatic Data Processing, Inc. -High RVI's and P/E's. Not attractive.
APD Air Products & Chemicals Inc. - RVI's are mid high, P/E's are ok
APL Atlas Pipeline Partners LP - #3 overall of the group - Pays dividend early Feb., sell May 37's look to get called.
BA Boeing Company - #5 overall of this group - early Feb div, mid to very high RVI;s, sell May look to get called.
BWP Boardwalk Pipeline Partners LP - mid RVI's, Feb div, sell near dated calls. The options pricing and selection are very thin, however, rolling the calls (selling near periods after each expiration) will add significant additional income to an already high dividend paying stock. The P/E's are astronomical as are most pipeline companies paying high dividends.
DBD Diebold, Inc - Feb pay stock, with nice dividend. Sell May in the money and look to get called.
DD E.I. Du Pont de Nemours - Sell the April 50's and look to get called.
DE Deere Company - THE DATA FOR THIS STOCK ARE WRONG FOR THE COLLECTIVE DATA (stock groupings immediately below ie: alpha sort/SSR sort, etc) But is correct on the individual stock page. RVI's are mid high, sell Feb 87.5's and look to roll.
EMR Emerson Electric Co. - w/o div info on stock page may not be correct - #4 overall of the group - Feb pay stock, ok P/E'a and mid RVI;s. Sell March 52.50's
FGP Ferrellgas Partners LP - #5 overall of this group - RVI's are mid range. Options are not very attractive because of liquidity. Nice dividind but high P/E.
GLW Corning Incorporated - low RVI's and P/E's. - this is a case where the analytic's are good but the fundamentals may be an issue. Earnings were down but beat estimates (read the news wires). If we only looked at the profile below we would say buy, however, an investor must also consider the fundamental data as well with this stock and all the stocks up for consideration.
GPC Genuine Parts Company - expensive all around
HI Hillenbrand Inc Common Stock - expensive - Top range RVI's and low options volatility.
HON Honeywell - #2 overall of this group - high RVI's good P/E's, Feb div - Sell March in the money calls.
HSC Harsco Corporation - ok profile, next div is in April, low RVI's very high P/E's
K Kellogg Company - low RVI's , good P/E's. Sell Feb at the money and look to roll - pays late Feb.
KFT Kraft Foods Inc. - Really high RVI's low options volatility - pass
KMB Kimberly-Clark Corp Common - Really high RVI's low options volatility - pass
Note: the tables shown are embedded .jpg files. This means that you can: 1) double left click them with your mouse to enlarge them, or 2) right click them with your mouse and choose to open them in a new window or tab, print, save, etc.As with everything we post, we may or may not have the stock and/or strategy in place in any one of our portfolios or may add it at any time. We do not make any buy or sell recommendations. We provide basic analytical research, some short commentary of the results and encourage you to do your own thorough due diligence prior to any purchase or sale.
| ADP | |||||||
| Automatic Data Processing, Inc. | |||||||
| Date: | 01/26/12 | ||||||
| 21.72 | Price Earnings | ||||||
| 18.48 | Forward P/E | ||||||
| 2.80% | Dividend | ||||||
| 03/07/12 | Ex-Div Date | ||||||
| 03/07/12 | Next Date | ||||||
| $55.82 | Spot | $55.82 | $55.82 | ||||
| 02/17/12 | Options expiration | 05/18/12 | 08/17/12 | ||||
| **** | |||||||
| $55.00 | Strike | $55.00 | $55.00 | ||||
| $1.30 | Premium | $2.50 | $3.20 | ||||
| 0.00% | Dividend paid | 0.70% | 0.70% | ||||
| $0.48 | Net | $1.69 | $2.39 | ||||
| 0.86% | SSR | 3.72% | 4.98% | ||||
| 22 | Days | 113 | 204 | ||||
| 0.23 | Ratio | 4.33 | |||||
| 0.039% | Days earning | 0.033% | 0.024% | ||||
| $54.52 | Break even | $53.32 | $52.62 | ||||
| -2.33% | Downside % | -4.48% | -5.73% | ||||
| $57.12 | Call Spot | $58.32 | $59.02 | ||||
| 0.9% | Return if called | 3.2% | 4.5% | ||||
| RVI | |||||||
| 89.66% | Spot | 89.66% | 89.66% | ||||
| 83.04% | Strike | 83.04% | 83.04% | ||||
| 100.16% | Call | 109.85% | 115.51% | ||||
| $44.72 | Min | $44.72 | $44.72 | ||||
| $57.10 | Max | $57.10 | $57.10 | ||||
| $12.38 | Range | $12.38 | $12.38 | ||||
| $50.91 | Average | $50.91 | $50.91 |
| APD | ||||
| Air Products & Chemicals Inc. | ||||
| Date: | 01/26/12 | |||
| 15.66 | Price Earnings | |||
| 12.95 | Forward P/E | |||
| 2.60% | Dividend | |||
| 03/29/12 | Ex-Div Date | |||
| 03/29/12 | Next Date | |||
| $88.16 | Spot | $88.16 | $88.16 | |
| 02/17/12 | Options expiration | 03/16/12 | 06/15/12 | |
| **** | ||||
| $90.00 | Strike | $90.00 | $90.00 | |
| $0.75 | Premium | $1.65 | $3.60 | |
| 0.00% | Dividend paid | 0.00% | 0.65% | |
| $0.75 | Net | $1.65 | $3.60 | |
| 0.85% | SSR | 1.87% | 4.73% | |
| 22 | Days | 50 | 141 | |
| 0.45 | Ratio | 2.2 | ||
| 0.039% | Days earning | 0.037% | 0.034% | |
| $87.41 | Break even | $86.51 | $84.56 | |
| -0.85% | Downside % | -1.87% | -4.08% | |
| $88.91 | Call Spot | $89.81 | $91.76 | |
| 3.0% | Return if called | 4.0% | 6.4% | |
| RVI | ||||
| 61.77% | Spot | 61.77% | 61.77% | |
| 68.92% | Strike | 68.92% | 68.92% | |
| 64.69% | Call | 68.18% | 75.76% | |
| $72.26 | Min | $72.26 | $72.26 | |
| $98.00 | Max | $98.00 | $98.00 | |
| $25.74 | Range | $25.74 | $25.74 | |
| $85.13 | Average | $85.13 | $85.13 |
| GPC | ||||
| Genuine Parts Company | ||||
| Date: | 01/26/12 | |||
| 18.63 | Price Earnings | |||
| 16.27 | Forward P/E | |||
| 2.80% | Dividend | |||
| 03/07/12 | Ex-Div Date | |||
| 03/07/12 | Next Date | |||
| $64.66 | Spot | $64.66 | $64.66 | |
| 02/17/12 | Options expiration | 05/18/12 | 08/17/12 | |
| **** | ||||
| $65.00 | Strike | $65.00 | $65.00 | |
| $0.90 | Premium | $2.35 | $3.30 | |
| 0.00% | Dividend paid | 0.70% | 0.70% | |
| $0.90 | Net | $2.35 | $3.30 | |
| 1.39% | SSR | 4.33% | 5.80% | |
| 22 | Days | 113 | 204 | |
| 0.32 | Ratio | 3.11 | ||
| 0.063% | Days earning | 0.038% | 0.028% | |
| $63.76 | Break even | $62.31 | $61.36 | |
| -1.39% | Downside % | -3.63% | -5.10% | |
| $65.56 | Call Spot | $67.01 | $67.96 | |
| 1.9% | Return if called | 4.3% | 5.9% | |
| RVI | ||||
| 96.27% | Spot | 96.27% | 96.27% | |
| 98.03% | Strike | 98.03% | 98.03% | |
| 100.93% | Call | 108.45% | 113.38% | |
| $46.10 | Min | $46.10 | $46.10 | |
| $65.38 | Max | $65.38 | $65.38 | |
| $19.28 | Range | $19.28 | $19.28 | |
| $55.74 | Average | $55.74 | $55.74 |
