We chose these 18 stocks as our first group of this new year.
Although stocks appear to be cheap, we continue to remain cautious with a large cash position.
Our initial investments will be based on stocks that we believe will be stable and offer the greatest income potential from dividend and the sale of calls. Marginal stocks will be analyzed but their purchase is unlikely.
S&P 500 close: 1,277.81
VIX close:
Symbol Name
CAG ConAgra Foods, Inc - RVI's are at 100, P/E's are ok - like the stock but the buy/write is not attractive.
EPB El Paso Pipeline Partners, LP - RVI's are mid to high, Feb 20 earnings announcement. P/E is ok and the dividend is attractive. Note that the near date is Feb as the Jan options did not look attractive.
EPD Enterprise Products Partners LP - Last of the group overall - RVI's are at 100, earnings will be announced on Feb 13. The P/E is high and well above its competitors average of 17.
ETN Eaton Corporation - Mid RVI's - SSR's and Days earnings are good for both Jan and Feb. Would go long and write for Jan expri and re-establish for Feb.
FCX Freeport McMoRan - #2 overall (even with correction for dividend) - Jan 19 earnings announcement - ignore our est date for payment - RVI's are low - The CORRECTED SSR is 2.91% and Days earning is .26% without the estimated dividend.
INTC Intel Corporation - one of the #4 overall's - RVI's are near or at 100, SSR's are good as is near term Days earning. Would go long and sell the Jan in the money looking to re-establish for an early Feb dividend payment.
JNJ Johnson & Johnson - high RVI's, payment late Feb.
KMP Kinder Morgan Pipeline - Crazy P/E- Pays late January - earnings announcement on January 18th - nice dividend. As with PAA and PG need to value the dividend to the premium if you write beyond January expri.
LINE Linn Energy, LLC - one of 3 #4's overall - mid to high RVI's - P/E's are a bit high but the dividend is very high above 7%.
MDT Medtronic Inc. - #8 overall - RVI's are high mid to high - Dividend record date was last week - SSR's and Days earning are good.
MMM 3M Company - Mid RVI's, Good SSR's and Days earning.
OLN Olin Corp - earning announcement on Jan 30 - RVI's are mid, P/E's are low and dividend is high. Expect dividend payment early Feb.
PAA Plains All American Pipeline, L.P. - #7 overall - #4 in SSR at 3.3% for Feb call. Similar to P&G below the dive is pretty healthy relative to the call premium. Expected div at $1 and premium at $1.42.
PG The Procter & Gamble Company - Low on the overall list, RVI's are high. Nice dividend payment expected in January. The SSR is less than 1% for the near date. Selling the in the money call at $65 is too expensive versus the expected dividend (est div = 53¢ net premium = 47¢).
PH Parker-Hannifon Corp - #2 overall - RVI's are around 50, P/E's are low as is the yield.
SCCO Southern Copper Corp - 3rd overall in Days earning and 9th in SSR - RVI's are in the 30's, P/E's are low and the dividend is high. The analysts are not in agreement on the stock with Barclay's underweight and BMO market perform. Earnings announcement on Jan 27th.
UVV Universal Corp Common - Dividend paid earlier in the month and RVI's are high.
VALE VALE S.A. American Depository - # 1 overall and in both SSR and Days earning - Low RVI's as well. Issues are exchange rate exposure and low dividend.
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.
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