In the article, “Sewing Up Profits – Covered Calls Investing”, we analyzed the retail fabric market and decided a covered calls stock options strategy was prudent for this segment in light of the popularity of hand made clothing by today’s teens. Two positions were selected for this strategy, and both were profitable returning an average of +2.5%. The Jo-Ann Stores (JAS) position returned the maximum profit of +3.1% and the A.C. Moore Arts & Crafts (ACMR) position returned +1.9%.
IBM – “Guten Tag” Covered Call – Bull-Call Debit Spread
Shares of International Business Machines Corp. (IBM) reached a new 52-week high of $96.06 on Monday, December 18th. This follows news reporting the computer giant won a large contract with the German government. Trading volume for IBM was also higher on Monday. The contract, initiated by the German parliament for networking, hardware and services, is valued at about $9 billion.
Conoco (COP) – Covered Call – Bull-Call Debit Spread
Crude oil reserves have depleted more than expected, a government report released Wednesday found. This development lifted oil prices slightly and OPEC, at its meeting in Abuja (ah-boo-ja), Nigeria last Thursday, announced it would wait until after peak winter demands had subsided before implementing additional production cuts. Light crude January futures rose 92 cents to settle at $63.43 a barrel on the New York Mercantile Exchange on Friday.
SimpleTech (STEC) – Simply Covered Call Profits
SimpleTech Inc. (STEC), a manufacturer of memory chips, increased its fourth-quarter earnings outlook. News sent shares sailing upward over 7 percent in pre-market trading. The company said its consumer and OEM divisions are performing more strongly than expected. SimpleTech reported earnings of around 18 cents per share, on sales of over $10 million, in the fourth quarter. Earlier guidance pinned earnings at around 16 cents per share on sales of around $95 million. Analysts average estimates agreed with the earlier guidance supplied by the company.
Fuel Systems Solutions (FSYS) – Fuel for Covered Call Investing
Fuel Systems Solutions, Inc. (FSYS) announced yesterday the company would be introducing a Sequent Direct Injection system enabling gasoline-powered vehicles to be converted to operate on liquefied petroleum gas.The system was introduced at the International Automobile Exhibition in Bologna, Italy last week. The company announced the certification program would take until February 2007. After the certification, Fuel Systems Solutions will commence sales of the product. The initial sales goal in Italy is approximately $1.0 million from aftermarket vehicle conversions.
DJIA Price Resistance – Another +8.1% Return – Dec. 06
In the article, “DJIA – Stock Price Resistance“, we outlined a bearish strategy for the Dow Jones Industrial Average ($DJX) when the index is close to its historic high using bear call spreads options. In article, “DJIA – Price Resistance – Nice 8.1% for Nov 06“, we noted the success of the strategy, and we also selected new positions for December. The December selections were fully profitable returning a very nice +8.1% once again.
Burger King (BKC) – Whopper Covered Calls
Burger King (BKC) stock rose 3.5 percent yesterday to hit a new 52-week high of $20.13. Shares of major fast-food chains are on the rise after industry leader McDonald’s Corp. (MCD) reported same-store sales increased over 6 percent in November. Same-store sales statistics, a metric measuring sales in stores open at least one year, is a key indicator of company health. Analysts expected McDonald’s to report 4.5 percent same-store sales growth. McDonald’s stock was down yesterday after reaching a high of $43.89 on Friday. Some analysts have increased their price target on MCD shares to $44 from $43. Suggesting McDonald’s might produce results exceeding per share profit for 2007.
Covered Call Profits – Maybe Not Faro Off
Faro Technologies Inc. (FARO) announced Tuesday the principle claims in a patent lawsuit filed by its largest competitor, Swedish firm Hexagon AB’s subsidiary Romer-CimCore, were rejected by the U.S. Patent Office.If the patent rejection stands it will cause Faro to prevail in the ongoing litigation. The lawsuit was filed in 2003 and concerns a disagreement over a 3D machine rotation product manufactured by Hexagon subsidiary Romer-CimCore in San Diego, Calififornia.
Build-A-Bear (BBW) Expanding – Covered Call Investing
Build-A-Bear Workshop (BBW) returned +4.5% on a November stock options recommendation in article, “Politics and Options Investing“, and is still above the breakeven price of a trade mentioned in a November 29, 2006 blog entry “2%-12% Returns In Less Than 1 Month“. The initial article compared the financial success of blue (Democratic leaning) companies with red (Republican leaning) companies. This article will take a more detailed look at Build-A-Bear’s business model and viability as a sound stock options investment.
Quiksilver (ZQK) – “Hola” Mexico
Quiksilver, Inc. (ZQK) announced on Wednesday it has formed a joint venture with PBM International to market, sell and distribute “Quiksilver” and “Roxy” branded products in Mexico. The joint venture will be responsible for establishing a distribution network of retail stores in Mexico.