Covered call trade on Expeditors International of Washington, Inc. (EXPD).
Expeditors International of Washington, Inc. (EXPD) , today announced that
its Board of Directors has declared a semi-annual cash dividend of $.25per share, payable on December 15, 2011 to shareholders of record as of December 1, 2011.
its Board of Directors has declared a semi-annual cash dividend of $.25per share, payable on December 15, 2011 to shareholders of record as of December 1, 2011.
STRATEGY: Look at the December 2011 42.5 covered call. For each 100
shares of Expeditors International of Washington Inc (EXPD) stock you buy, sell
one December 2011 42.5 call option for a 40.85 (43.65 – 2.80) debit or better.
That’s potentially a 4.68% assigned return including the dividend.
shares of Expeditors International of Washington Inc (EXPD) stock you buy, sell
one December 2011 42.5 call option for a 40.85 (43.65 – 2.80) debit or better.
That’s potentially a 4.68% assigned return including the dividend.
TECHNICAL: The technicals for EXPD are bullish with a weak upward trend.
The stock is under accumulation with support at 45.19. S&P rates this stock
4 STARS (out of five) – buy.
The stock is under accumulation with support at 45.19. S&P rates this stock
4 STARS (out of five) – buy.
RISK: For those seeking downside protection with a blanket put, buy the
May 2012 42.5 Put for 4.10. Sell the put when you exit the covered call
trade.
May 2012 42.5 Put for 4.10. Sell the put when you exit the covered call
trade.
S&P RESEARCH: S&P reiterates buy opinion on shares of Expeditors
International (EXPD) . Q3 EPS is $0.50, vs. $0.44, $0.01 ahead of our estimate
and Capital IQ consensus. However,$0.03 of EPS came from higher non operating
income. Gross revenues were disappointing, but net revenue growth improved on
better airfreight margins. We think EXPD did a good job in a difficult
operating environment, and believe it remains well positioned for an eventual
improvement in shipping demand. We cut our ’11 and ’12 EPS forecasts
to $1.80 and $1.98from $1.89 and $2.28. We cut our target price
to $60 from $65, 30X our ’12 estimate, in the middle of EXPD’s historical
range.
International (EXPD) . Q3 EPS is $0.50, vs. $0.44, $0.01 ahead of our estimate
and Capital IQ consensus. However,$0.03 of EPS came from higher non operating
income. Gross revenues were disappointing, but net revenue growth improved on
better airfreight margins. We think EXPD did a good job in a difficult
operating environment, and believe it remains well positioned for an eventual
improvement in shipping demand. We cut our ’11 and ’12 EPS forecasts
to $1.80 and $1.98from $1.89 and $2.28. We cut our target price
to $60 from $65, 30X our ’12 estimate, in the middle of EXPD’s historical
range.
