Stock Option Investment Advice

Boring Company Wins ‘Product of the Year’ – AVX Corp (AVX)

It turns out some of the eggheads who were playing with their electronics kit while you were trying to make it to the 10th level of the Legend of Zelda may have stumbled across something. It’s called a low inductance decoupling capacitor. And no, it’s not a device you can hook up to a DeLorean to go back in time.

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A decoupling capacitor decouples one part of an electrical network from another to prevent malfunction or damage. They are commonly used in power supplies where a DC voltage might have an AC signal superimposed on it. They are also used in circuit boards where switching could cause power fluctuations in another part of the board. It is for these circuit board level applications AVX won its product of the year award.

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“The Product of the Year award was established to identify and reward products that are innovative in their design, represent a significant advancement in a technology or its application, and display a substantial achievement in the price and/or performance of the device,” said Ralph Raiola, Electronic Products editor.

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“AVX is pleased to receive a 2006 Product of the Year award from Electronic Products for the LGA Decoupling Capacitor,” said Craig Hunter, AVX strategic marketing manager. “Receiving this award for the second consecutive year validates our continued commitment to providing our customers with innovative technology in a variety of applications and environments.”

Because the company has won the award two consecutive years in a row, and because it appears to be a good value now with a 1.6 price to book, a higher than industry average profit margin, zero debt, and nearly 115% income growth. On the downside, only one of six analysts rating the stock gives it higher than a hold rating.

Competitors for include:
Potential Trades:
All of the following option trades have 40 days until expiration. AVX Corp is currently trading at $15.11. These trades were discovered using the powerful suite of option search tools found at PowerOptions.

Covered Call – AVX Corp (AVX) $ 15.11 (40)
AVXDC 07 APR $15.0 $0.60 4.00% 3.40% 3.40%
AVXEC 07 MAY $15.0 $0.80 5.30% 4.80% 4.80%
(To see more details for a company click on the company’s ticker symbol above)

The April covered call trade, an in the money covered call, offers 4.0% downside protection and a potential profit of 3.4% if the stock remains unchanged or rises. The break-even price of this trade is $14.51. The net cost of this trade, per 100 options, is $1,451.00.

The May covered call trade, an in the money covered call, offers 5.3% downside protection and a potential profit of 4.8% if the stock remains unchanged or rises. The break-even price of this trade is $14.31. The net cost of this trade, per 100 options, is $1,431.00.

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[tags] Ralph Raiola, Electronic Products, AVX, AVX Corp., covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options [/tags]

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