Over the previous ten years the following stocks have shown incredible returns on investment, and are poised to continue this trend in the future. Long-term investments like these are great for options trading, because you can make constant income while you are waiting for that big upward price move.
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Best Buy (BBY) has posted strong returns on equity over the past decade. Its 10-year average return on equity (ROE) is 23.1%, and it hasn’t had an annual ROE less than 20% in any year in that period. That’s a sign of strong management and a durable competitive advantage over its competition. With a market cap of $18.1 billion it sells everything from refrigerators to DVD players to computers to office furniture. With consumers’ need for the latest technology not ending anytime soon, this company has great growth potential. In an effort to increase its annual sales to $80 billion over the next five years, it plans to open new stores, expand its product offerings, and expand the Pacific kitchen and bath centers across the US. This progressive company is planning a $2 billion joint venture with Britain’s Carphone Warehouse Group to expand its operations across Europe. A covered call investing position for Best Buy is currently available with a potential return of 3.4% (29 days) with 7.9% downside protection. Even if the price of Best Buy’s stock drops less than 7.9% at stock options expiration, the position will remain profitable.
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Abercrombie and Fitch
Abercrombie and Fitch (ANF), a clothing retailer that caters to young adults, has had a steady and stable balance sheet over the past decade. Its earnings per share have increased from $.96 to $5.20 and it has an ROE of 30.6%. In spite of the recent slump in retail sales, analysts give a strong buy recommendation to this company, and predict a price rise from $54 to as high as $100 in the next 12 months. For those interesting in investing in a covered call for Abercrombie and Fitch, an August position is available with a potential return of 6%, in only 29 days. The position also has downside protection of 6.3%.Clean Harbors
Clean Harbors (CLHB), founded 28 years ago, provides a smorgasbord of environmental services. Due to the increasing concern of consumers in the proper treatment and handling of hazardous waste, this fast growing company went from selling at $1.56 in 97 to $51.70 in 07. With plenty of room for growth, analysts predict a market share growth of 1000% in the near future. A $10,000 covered call investing position in Clean Harbors could potentially return $500 in only 29 days, that’s a 5% potential return.
Immucor (BLUD) is out for blood that is testing blood for antibodies and other serum components prior to transfusions. With its acquisition of Gamma Biologicals and Biopool International in the past decade, this market leader in blood testing systems sales has had a 2,893% rate of return. Rising stock prices from $1.14 in 97 to $33.39 in 07 has been a result of its worldwide expansion. Their recent double-digit sales growth is generating investor interest today. A covered call investing position for BLUD is currently available for August stock options expiration with a potential return of 2.9%.
Frontier Oil Corporation
Frontier Oil Corporation (FTO), with a rate of return of more than 2300% in the past decade, is an independent energy company engaged in crude oil refining and the wholesale marketing of refined petroleum products. In February 2007, the company bought Ethanol Management Company. The oil refiner has a 37.60% return of investment this year compared to a rate of return of 9.16%in the industry and 15.64% in their sector. Its low debt and consistent operating performance puts it ahead of its competition. Frontier Oil Corporation’s stock has an available covered call investing position clocking in at 8.6%, a $10,000 investment could potentially return $860, in only 29 days.
These companies stand out among their competition for their good business practices, fine leadership and potential for growth. Because so many variables determine the price of a stock over time, protect yourself with stock option strategies that can hedge your portfolio while putting cash in your pocket.
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.
PowerOptions‘ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
[tags] DVD, Carphone Warehouse Group, Europe, Gamma Biologicals, Biopool International, Ethanol Management Company, ANF, Abercrombie & Fitch Co., BBY, Best Buy Co. Inc., BLUD, Immucor Inc., CLHB, Clean Harbor Inc, FTO, Frontier Oil Corp., covered call investing, covered call investment strategy, investment strategy, iron condor, options trading, poweroptions, stock option trading, stock options [/tags]