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Pfizer (PFE)
PFE : Nestle is buying Pfizer’s baby food division paying PFE 12 billion. Pfizer already has a cash horde of $3.54 billion in addition to short term investments of $23.27 billion. With the latest acquisition, the company’s cash and short term investments will total $39 billion. This is a huge and presents excellent opportunities for Pfizer. Given this, PFE appears a low risk bet in the near future… as it determines what to do with all this coin. RTMB is considering three options or a combination: Write puts on the 28 strike, buy the stock outright,or buy the stock and write calls against it.
Intel (INTC)
Intel’s stock has been a big mover in recent months yet has a modest PE of 11.6, and even at it’s current price, provides a dividend yield of better than 3%. Intel is making headways with a new chip for Mobile gaming called Ivy Bridge that will provide super graphics but at low power consumption. Intel also has estabished a business relationship to provide chips for Apple’s (AAPL) Mac computer. The company is launching its own new line of notebook chips. During the last year, INTC has been one of our ongoing top winners in writing puts; however as the stock price climbs, consideration is now on outright purchase of INTC with ability to write calls against it.
Lennar (LEN) and Toll Brothers (TOL)
Homebuilder stock prices are progressing upward as government numbers showed home sales in March higher than expected. Also Pulte reported better than expected earnings. That given, it appears our favorites, LEN and TOL, which have provided us ongoing profits this last year in Put Option writing are low risk in the near term. Again the options are to continue to Write Puts or buy the stocks outright and write calls against them.
PowerShares ETF (QQQ)
The put-call ratio on the QQQ jumps to 6.4-1, the highest level of bearish bets being placed in nearly 6 years, a rarity as fear creeps in to possible panic. As you investors know by now, what does one need to do when the market panics?
Microsoft (MSFT)
SInce inception of RTMB (our strategy), MSFT has been our second biggest profit winner in Put Option writing. With the advent of Microsoft 8 coming later this year, along with a 45% year-to-year growth rate in it’s entertainment and device division, and accelerating revenue growth since 2009, MSFT is a low risk option for writing put options.
Kimberly-Clark (KMB)
A noted mainstay dividend stock, KMB pays a solid 3.8% div and has increased it’s dividend for 39 straight years and expect a dividend increase announcement any day now. Buy on a dip.
The most recent picks by are:
A buy rating on KERX, and
a buy rating on BONT, and
a buy rating on OREX.
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