US Export Growth Heats Up - Covered Call Ideas in the Hottest Sectors
If you ask someone who has visited Europe recently, they will tell you it isn’t nearly as cheap as it used to be. The weak US dollar may put a strain on our foreign travel budgets, but it has meant domestically produced goods and services are looking less and less expensive to the global market.
Audio Podcast:
An audio podcast of this article is available at: poweropt.com/podcasts/2007_09_11_Exports.mp3
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Both US exports and imports reached record levels in July. This indicates a strong global demand for US products in certain sectors. In this blog, we will take an overview of the US Commerce Department numbers and look for attractive covered call trades in the strongest sectors.The civilian aircraft sector saw a large boost, partially because of sales of the Boeing Dreamliner and partially because of the consistent scheduling delays of the Airbus A380. Exports in this sector rose 32% in the month of July. The PowerOptions_ blog has done several articles on this; the most recent being “Orders for Durable Goods Increase - A Look at Boeing and Defense Contractors”.
Automobile and auto parts exports rose 14.6% to 11.3 billion. This goes nicely with reports of GM and Ford quality increases and an overall optimistic investor opinion of changes being made at both companies.
Exports of consumer drugs also rose substantially, according to the report.
Looking for trades using the PowerOptions Covered Call Search:
For the results below, we set up individual searches for the following sectors: Drug Manufacturers, Auto Manufacturers, and Aerospace/Defense - Major. After getting the results, we quickly checked the profile of the company (using the interactive ‘more info’ menu conveniently provided next to each trade) and removed companies that are not based in the USA.
This entire process took less than 5 minutes. Now the investor has a solid list of covered call trades based on the most current news. This could be easily be done while an investor drinks their morning coffee prior to the markets opening.
Potential Trades:
The following are the results found using the search described above. All of the following trades have either 37 days, in the case of the October trades, or 67 days, in the case of the November trades.
| Covered Call Search - Strong Exports | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Company Name |
Symbol | Stock Price |
Opt Sym |
Strike Info |
Option Bid |
Net Debit |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
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| Rigel Pharmas. Inc. | RIGL | 9.40 (+0.13) | QRGJB | 07 OCT 10.0 (39) | $0.50 | 8.9 | 5.3 | 5.6 | 12.4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Abraxis BioScience | ABBI | 21.76 (+0.03) | AQOJX | 07 OCT 22.5 (39) | $0.75 | 21.01 | 3.4 | 3.6 | 7.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Keryx Biopharmaceuticals Inc. | KERX | 10.06 (+0.33) | QKYJB | 07 OCT 10.0 (39) | $0.65 | 9.41 | 6.5 | 6.3 | 6.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Merck & Co. Inc. | MRK | 49.77 (-0.04) | MRKJJ | 07 OCT 50.0 (39) | $1.70 | 48.07 | 3.4 | 3.5 | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wyeth | WYE | 46.00 (-0.30) | WYEJI | 07 OCT 45.0 (39) | $2.45 | 43.55 | 5.3 | 3.3 | 3.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GlaxoSmithKline PLC | GSK | 53.85 (+0.80) | GSKKX | 07 NOV 52.5 (67) | $2.95 | 50.9 | 5.5 | 3.1 | 3.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boeing Co. | BA | 97.44 (+2.11) | BAKT | 07 NOV 100.0 (67) | $3.50 | 93.94 | 3.6 | 3.7 | 6.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Dynamics Corp. | GD | 79.35 (+0.65) | GDKP | 07 NOV 80.0 (67) | $3.10 | 76.25 | 3.9 | 4.1 | 4.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Northrop Grumman Corp. | NOC | 78.77 (+0.66) | NOCKP | 07 NOV 80.0 (67) | 2.5 | 76.27 | 3.2 | 3.3 | 4.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Raytheon Co. | RTN | 60.37 (+0.73) | RTNKL | 07 NOV 60.0 (67) | 2.8 | 57.57 | 4.6 | 4.2 | 4.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boeing Co. | BA | 97.44 (+2.11) | BAKS | 07 NOV 95.0 (67) | 6.2 | 91.24 | 6.4 | 4.1 | 4.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Motors Corp. | GM | 30.40 (+1.19) | GMJZ | 07 OCT 32.5 (39) | 1.25 | 29.15 | 4.1 | 4.3 | 11.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Motors Corp. | GM | 30.40 (+1.19) | GMJF | 07 OCT 30.0 (39) | 2.35 | 28.05 | 7.7 | 7 | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
These trades offer 3.2% to 7.7% downside protection and 3.1% to 12.4% potential profit. For the full profit to be realized, the stock must be above the option’s strike price at the end of the option period.
Some of the more interesting trades shown on the list are the General Motors $32.50 October covered call with an 11.5% potential profit and 4.1% downside, the Boeing $95 November covered call with a potential profit of 4.1% and a healthy 6.4% downside, and the Rigel October $10 trade with its 12.4% potential profit and 5.3% downside. However, especially with pharmaceutical, a significant amount of research in to each company’s current situation should be considered prior to pulling the trigger on any trade.
Competitors:
Competitors for RIGL include: Amgen Inc. (AMGN), and AutoImmune Inc. (AIMM.PK).
Competitors for ABBI include: Bristol-Myers Squibb Co. (BMY), Hospira Inc. (HSP), Teva Pharmaceutical Industries Ltd. (TEVA), Akorn Inc. (AKRX), Cubist Pharmas. Inc. (CBST), Cell Therapeutics Inc. (CTIC), and Sonus Pharmaceuticals Inc. (SNUS).
Competitors for KERX include: AstraZeneca plc (AZN), Bristol-Myers Squibb Co. (BMY), and Merck & Co. Inc. (MRK).
Competitors for MRK include: Bristol-Myers Squibb Co. (BMY), Pfizer Inc. (PFE), Sanofi-Aventis (SNY), Abbott Labs (ABT), AstraZeneca plc (AZN), BioCryst Pharmas. Inc. (BCRX), CurGen Corp. (CRGN), Cardiome Pharma Corp. (CRME), Dynavax Technologies Corp. (DVAX), GTx Inc. (GTXI), Hythiam Inc. (HYTM), Johnson & Johnson (JNJ), Keryx Biopharmaceuticals Inc. (KERX), Ligand Pharma. Inc. Class B (LGND), NPS Pharma. Inc. (NPSP), Nitromed Inc. (NTMD), Novavax Inc. (NVAX), Novartis AG (NVS), Sangamo Biosciences Inc. (SGMO), Trimeris Inc. (TRMS), and Watson Pharma. Inc. (WPI).
Competitors for WYE include: Eli Lilly & Co. (LLY), Novartis AG (NVS), Pfizer Inc. (PFE), Baxter Intl. Inc. (BAX), Columbia Laboratories Inc. (CBRX), Novavax Inc. (NVAX), Valeant Pharmas. Intl. (VRX), and Warner Chilcott Ltd. (WCRX).
Competitors for GSK include: Novartis AG (NVS), Pfizer Inc. (PFE), Sanofi-Aventis (SNY), Antigenics Inc. (AGEN), AtheroGenics Inc. (AGIX), Allos Therapeutics Inc. (ALTH), Adventrx Pharma. Inc. (ANX), Avanir Pharmas. (AVNR), Axcan Pharma Inc. (AXCA), AstraZeneca plc (AZN), BioCryst Pharmas. Inc. (BCRX), Biogen Idec Inc. (BIIB), Biosante Pharma. Inc. (BPA), CV Theraputics Inc. (CVTX), Genenntech Inc. (DNA), Discovery Labs. Inc. (DSCO), Dynavax Technologies Corp. (DVAX), Emisphere Technologies Inc. (EMIS), Epix Pharmas. Inc. (EPIX), Forest Labs. (FRX), Gilead Sciences Inc. (GILD), Genitope Corp. (GTOP), GTx Inc. (GTXI), Hollis-Eden Pharma. (HEPH), Human Genome Sciences Inc. (HGSI), Indevus Pharma. Inc. (IDEV), Idenix Pharma. Inc. (IDIX), Immunomedics Inc. (IMMU), Incyte Pharma. Inc. (INCY), Lilly (Eli) and Co. (LLY), The Medicines Co. (MDCO), MGI PHARMA Inc. (MOGN), Medicis Pharmaceutical Corp. (MRX), Nabi BioPharm. (NABI), Nitromed Inc. (NTMD), Protein Design Labs Inc. (PDLI), POZEN Inc. (POZN), Dr. Reddy Labs. Ltd. (RDY), Sepracor Inc. (SEPR), Schering-Plough Corp. (SGP), Salix Pharma. Inc. (SLXP), Telik Inc. (TELK), Trimeris Inc. (TRMS), Vical Inc. (VICL), and VIVUS Inc. (VVUS).
Competitors for BA include: Lockheed Martin Corporation (LMT), Northrop Grumman Corp. (NOC), Airbus S.A.S. (private), Applied Signal Tech. Inc. (APSG), Orbital Sciences Corp. (ORB), Raytheon Co. (RTN), and United Techs. Corp. (UTX).
Competitors for GD include: Lockheed Martin Corporation (LMT), Raytheon Co. (RTN), Northrop Grumman Newport News (private), Alliant Techsystems Inc. (ATK), Cubic Corp. (CUB), Elbit Systems (ESLT), Harris Corp. (HRS), and Northrop Grumman Corp. (NOC).
Competitors for NOC include: Boeing Co. (BA), General Dynamics Corp. (GD), Lockheed Martin Corporation (LMT), Elbit Systems (ESLT), II VI Inc. (IIVI), KVH Industries Inc. (KVHI), ManTech Intl. (MANT), Orbital Sciences Corp. (ORB), Raytheon Co. (RTN), Teledyne Tech. Inc. (TDY), and United Industrial Corp. (UIC).
Competitors for RTN include: Boeing Co. (BA), Lockheed Martin Corporation (LMT), Northrop Grumman Corp. (NOC), Alliant Techsystems Inc. (ATK), Rockwell Collins Inc. (COL), DRS Techs. Inc. (DRS), Endwave Corp. (ENWV), General Dynamics Corp. (GD), ITT Industries Inc. (ITT), L-3 Communications Inc. (LLL), Teledyne Tech. Inc. (TDY), and Teleflex Inc. (TFX).
Competitors for GM include: Daimlerchrysler AG (DAI), Ford Motor Co. (F), Toyota Motor Corp. (TM), Genuine Parts Co. (GPC), Honda Motor Co. Ltd. ADR (HMC), Nissan Motors AD (NSANY), and Tata Motors Ltd. (TTM).
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions‘ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
Technorati Tags: Europe, US Commerce Department, Airbus A380, Airbus S.A.S., Northrop Grumman Newport News, ABT, Abbott Labs, AGEN, Antigenics Inc., AGIX, AtheroGenics Inc., AKRX, Akorn Inc., ALTH, Allos Therapeutics Inc., AMGN, Amgen Inc., ANX, Adventrx Pharma. Inc., APSG, Applied Signal Tech. Inc., ATK, Alliant Techsystems Inc., AVNR, Avanir Pharmas., AXCA, Axcan Pharma Inc., AZN, AstraZeneca plc, BA, Boeing Co., BAX, Baxter Intl. Inc., BCRX, BioCryst Pharmas. Inc., BIIB, Biogen Idec Inc., BMY, Bristol-Myers Squibb Co., BPA, Biosante Pharma. Inc., CBRX, Columbia Laboratories Inc., CBST, Cubist Pharmas. Inc., COL, Rockwell Collins Inc., CRGN, CurGen Corp., CRME, Cardiome Pharma Corp., CTIC, Cell Therapeutics Inc., CUB, Cubic Corp., CVTX, CV Theraputics Inc., DAI, Daimlerchrysler AG, DNA, Genenntech Inc., DRS, DRS Techs. Inc., DSCO, Discovery Labs. Inc., DVAX, Dynavax Technologies Corp., EMIS, Emisphere Technologies Inc., ENWV, Endwave Corp., EPIX, Epix Pharmas. Inc., ESLT, Elbit Systems, F, Ford Motor Co., FRX, Forest Labs., GD, General Dynamics Corp., GILD, Gilead Sciences Inc., GPC, Genuine Parts Co., GTOP, Genitope Corp., GTXI, GTx Inc., HEPH, Hollis-Eden Pharma., HGSI, Human Genome Sciences Inc., HMC, Honda Motor Co. Ltd. ADR, HRS, Harris Corp., HSP, Hospira Inc., HYTM, Hythiam Inc., IDEV, Indevus Pharma. Inc., IDIX, Idenix Pharma. Inc., IIVI, II VI Inc., IMMU, Immunomedics Inc., INCY, Incyte Pharma. Inc., ITT, ITT Industries Inc., JNJ, Johnson & Johnson, KERX, Keryx Biopharmaceuticals Inc., KVHI, KVH Industries Inc., LGND, Ligand Pharma. Inc. Class B, LLL, L-3 Communications Inc., LLY, Lilly (Eli) and Co., LMT, Lockheed Martin Corp., ORB, Orbital Sciences Corp., PDLI, Protein Design Labs Inc., PFE, Pfizer Inc., POZN, POZEN Inc., RDY, Dr. Reddy Labs. Ltd., RTN, Raytheon Co., SEPR, Sepracor Inc., SGMO, Sangamo Biosciences Inc., SGP, Schering-Plough Corp., SLXP, Salix Pharma. Inc., SNUS, Sonus Pharmaceuticals Inc., SNY, Sanofi-Synthelabo, TDY, Teledyne Tech. Inc., TELK, Telik Inc., TEVA, Teva Pharma. Indus. Ltd., TFX, Teleflex Inc., TM, Toyota Motor Corp., TRMS, Trimeris Inc., TTM, Tata Motors Ltd., UIC, United Industrial Corp., UTX, United Techs. Corp., VICL, Vical Inc., VRX, Valeant Pharmas. Intl., VVUS, VIVUS Inc., WCRX, Warner Chilcott Ltd., WPI, Watson Pharma. Inc., poweroptions
