Covered Call Recommendation on Yahoo!
STRATEGY:
Look at the January 12.50 covered call. For each 100 shares of Yahoo (YHOO) stock you buy, sell one January 12.50 covered call option for an 11.25 (13.38 – 2.13) debit or better. That’s potentially an 11.1% assigned return. The technicals for YHOO are bullish with a weak downward trend. The stock is under accumulation with support at 12.45. S&P rates this stock 4 STARS (out of five) – buy.
S&P reiterates buy opinion on shares of Yahoo (YHOO) . YHOO announces Carol Bartz has been relieved of her CEO duties. CFO Tim Morse continues in his current role and has been appointed interim CEO. The board is engaging an executive search firm to help identify CEO candidates. We are not surprised by this news. Bartz became CEO inJanuary 2009 and was widely criticized for not turning YHOO around. She worked to refocus YHOO, which is now being positioned as the “premier digital a media company,” but was being run by a combative long-time technology executive. We think this change makes sense and should be a positive for the stock.
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