In the first episode of HBO’s ‘The Sopranos,’ Tony Soprano presents himself to his therapist as a waste management consultant. Immediately, his psychiatrist reveals her understanding this is synonymous for Tony’s real, and substantially seamier, occupation.
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As avid viewers know, the last episode of the second half of the sixth season, the final season, will air on June 10th. Many are predicting it will also be the end of the world’s most notorious waste management consultant.
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Today, the PowerOptions weblog will take a look at some covered calls in the waste management sector. There are some solid companies in the sector, and it is a market where the supply of customers and their service needs are nearly guaranteed to increase with time.
Companies Profiled:
Waste Management Inc. (WMI) – This company provides waste management services in the United States, Puerto Rico, and Canada. They also offer transfer and recycling services. The company was founded in 1894. It was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. is based in Houston, Texas.
Stericycle Inc. (SRCL) – This company provides regulated medical waste management services in the United States. The company also operates in the United Kingdom, Mexico, Canada, Ireland, Argentina, and the Puerto Rico. The company was founded in 1989 and is based in Lake Forest, Illinois.
Clean Harbors, Inc. (CLHB) – This company provides environmental services in North America. The company primarily collects, transports, treats, and disposes hazardous and non-hazardous waste. The company was founded in 1980 and is based in Norwell, Massachusetts.
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Potential Trades: All of the following option trades have 53 days until expiration. These trades were discovered using the powerful suite of option search tools found at PowerOptions.
| PowerOptions covered call Waste Management (53 days) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price |
OPTION | Strike Info |
Opt Bid |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| WMI | $39.39 | WMIGH | 07 JUL $40.00 | $0.80 | 2.00% | 2.10% | 3.90% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SRCL | $89.07 | URLGR | 07 JUL $90.00 | $2.60 | 2.90% | 3.00% | 4.10% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CLHB | $47.72 | QPBGJ | 07 JUL $50.00 | $1.05 | 2.20% | 2.20% | 7.10% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WMI
WMI – The Waste Management trade involves the July $40 call option and offers 2% downside protection and 3.9% potential profit if the stock is above the $40.00 strike price at the end of the option period.
Competitors for WMI include: Allied Waste Industries Inc. (AW), Republic Services Inc. (RSG), Safety-Kleen Systems, Inc. (private), Clean Harbor Inc (CLHB), Casella Waste Sys. Inc. (CWST), Stericycle Inc. (SRCL), SunOpta Inc. (STKL), and Waste Connections Inc. (WCN).
SRCL
SRCL – The Stericycle trade involves the July $90.00 call option and offers 2.9% downside protection and 4.1% potential profit if the stock is above the $90.00 strike price at the end of the option period.
Competitors for SRCL include: American Ecology Corp. (ECOL), Waste Management, Inc. (WMI), and Microtek Medical Holdings, Inc. (private).
CLHB
CLHB – The Clean Harbors trade involves the July $50.00 call option and offers 2.2% downside protection and 7.1% potential profit if the stock is above the $50.00 strike price at the end of the option period.
Competitors for CLHB include: Waste Management, Inc. (WMI), Philip Services Corporation (private), Veolia ES Technical Solutions LLC (private), and OMNI Energy Services Corp. (OMNI).
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[tags] The Sopranos, United States, Puerto Rico, Canada, Houston, Texas, Mexico, Ireland, Argentina, Lake Forest, Illinois, Norwell, Massachusetts, Safety-Kleen Systems, Inc., Microtek Medical Holdings, Inc., Philip Services Corporation, Veolia ES Technical Solutions LLC, AW, Allied Waste Indus. Inc., CLHB, Clean Harbor Inc, CWST, Casella Waste Sys. Inc., OMNI, OMNI Energy Services Corp., RSG, Republic Services Inc. Class A, SRCL, Stericycle Inc., STKL, SunOpta Inc., WCN, Waste Connections Inc., WMI, Waste Management Inc., bear put debit spreads, bear-call credit spreads, bull call debit spreads, bull-put credit spreads, covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options [/tags]