First quarter 2014 trading stocks. These are the securities we use for trading since we believe they are priced at a good value. Therefore the strike price or just above that price would be a good entry point for long term buyers.
We are option traders. Hedging and leverage is our stock in trade. Our purpose is free cash flow and profits from selling put options. Put options offer the buyer insurance on stock they currently own or wish to own at a strike price. The buyer pays us a premium to provide that insurance. Therefore we are "the house" in this transaction and the odds favor us winning the insurance bet. However much of those odds depends on our ability to select good stocks and correct strike prices on options.
Our current profits goal remains around 12% annually, in 2013 we produced about 9.5% profits on total insured stock values.
AFL..We continue to like the insurance stock due to the excellent valuation. Little downside risk with the duck. Strike price $60.
ARCP..With mergers coming this company will be the largest triple net leaser in the country. We like triple net leasing a lot and we believe this company is moving up. Excellent sustainable yield above 7%. Strike price $12.50
AAPL...Careful price selection is important, but Apple continues to be valued priced at around 13 PE. Frankly we have concluded Apple people are hooked like drug attics on their devices and will pay anything to keep them. Our strike price is $475.
BP..Oil major that is slowly exiting the problems of the Gulf oil spill. Very attractively priced at around 6 PE so our strike price of $45 looks even better.
CSCO...Still the king of routers and hard to avoid buying something they make if you are building a network. Good value right now. Strike price $19.
IBM..Warren Buffet is buying it and it is value priced. Add in a huge buyback reducing shares regularly. Strike price $170
JPM..Big banks still attractively priced. We like JPM right now at $50.
KO...Coca Cola is also a value priced stock and we are slowly thinking their might be a good reason why as consumers switch tastes. Our strike price of $38 should be safe, but we might exit soon.
NNC...We discussed this one last week in a posting. Already has moved up a bit, but still a good buy anywhere here around $12.10 plus a few cents. This is a long position for us at 3000 shares and we might add another 2000 if there is near term weakness.
NNN...Strike price of $25. Great long term holding which has become a much less attractive trading stock due to price issues with options so we might exit soon.
O...We love Realty Income and sleep well trading it. One of the best shareholder friendly companies out there. Monthly dividend over 5% for those looking to buy. Strike price $35.
PM...Best long term tobacco holding right now for increasing dividend and capital gains opportunities. Strike price $82.50
POT...Fertilizer giant with our strike price of $29. We believe POT is still oversold even in this weak fertilizer market.
SHLD...Lousy retailer, good real estate play. Patience is necessary and a good price too. Strike price of $34.
SO..Value priced electric utility at $29. Utilities have been beaten down a good bit due to Obama's EPA. Despite all the efforts by Obama and democrats to move us to solar power and such regulated utilities will continue to do well as many switch to gas power generation. SO is the best placed going forward.
T...Premier communications company. Strike price of $33. Good solid safe pick.
VZ...Like T above, good solid safe pick in communications. Strike price at $45.
MONIF...We have added this one for those of you who want to gamble some money. We have not pulled the trigger, but we believe this financial operation has a huge up side from it's just over $1 price. Good speculative play.
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