Get Rich - Stay Rich - Investing for Monthly Income

Posts Tagged ‘covered writes’

Defensive Stocks For a Volitile Market

In markets like we experienced the previous week, you must make adjustments to your monthly income investments.  First, start with a list of defensive stocks that can hold up in all market conditions.  You should make sure these stocks pay a decent dividend for income.  You then sell covered calls on these defensive stocks for monthly income.  Lastly, you must buy a Blanket Put (protective put) to ensure the return of your capital.  See the “Defensive Stocks For Monthly Income Report” shown below.

 

List of Covered Call Trades for September 2011

 After two weeks of uncertainty and high volatility equities look as if they have found a short-term bottom.  For covered call traders, there are so many ideas available but the market still is not as stable as we would like it to be.   All of the improvement after Tuesday’s  reversal could be unwound if there is more negative news from Europe.  Our colleagues in Europe reminds us Italy is a huge debt problem and  since the European banks will need to raise capital, they will tighten lending,  especially interbank lending which may create liquidity issues.
As for last week’s volatility in the equity  markets, here is an appropriate quote from Samuel Brittan in last Thursdays  Financial Times. “The stock exchange always has been and always will be a  mixture of investment appraisal and sheer gambling.”  With this thought in mind, we still need to exercise caution with covered call trades.  The list below is primarily conservative stock trades with Coke, Exxon, Altria and General Mills.  The covered call trades will create monthly income while these stocks have nice dividend yields to add some income.
Covered Call Trades

Click to enlarge

The Coca-Cola Company (KO) is a non-alcoholic beverage company. The Company owns
or licenses and markets more than 500 non-alcoholic beverage brands, primarily
sparkling beverages but also a variety of still beverages such as waters,
enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and
energy and sports drinks. It also owns and markets non-alcoholic sparkling
beverage brands, including Diet Coke, Fanta and Sprite. It manufactures, markets
and sells, beverage concentrates, referred to as beverage bases, and syrups,
including fountain syrups (the concentrate business or concentrate operations),
and finished sparkling and still beverages (finished products business or
finished products operations).It operates in six segments: Eurasia and Africa,
Europe, Latin America, North America, Pacific, Bottling Investments and
Corporate. On October 2, 2010, it acquired the North American business of
Coca-Cola Enterprises Inc. (CCE).
Exxon Mobil Corporation (XOM) is a manufacturer and marketer of
commodity petrochemicals, including olefins, aromatics, polyethylene and
polypropylene plastics and a range of specialty products. It also has interests
in electric power generation facilities. It has many divisions and hundreds of
affiliates with names that include ExxonMobil, Exxon, Esso or Mobil. Divisions
and affiliated companies of ExxonMobil operate or market products in the United
States and other countries of the world. Their principal business is energy,
involving exploration for, and production of, crude oil and natural gas,
manufacture of petroleum products and transportation and sale of crude oil,
natural gas and petroleum products. On June 25, 2010, it acquired XTO Energy
Inc. by merging a wholly owned subsidiary of ExxonMobil with and into XTO. In
October 2010, Global Partners LP acquired retail gasoline stations from Exxon
Mobil. In June 2011, the Company acquired Phillips Resources.
CVS Caremark Corporation (CVS) is a pharmacy healthcare provider
in the United States. It provides pharmacy services through its pharmacy benefit
management (PBM) mail order and specialty pharmacy division, Caremark Pharmacy
Services; approximately 7,000 CVS/pharmacy retail stores; retail-based health
clinic subsidiary, MinuteClinic, and through its online pharmacy, CVS.com. It
has three segments: Pharmacy Services, Retail Pharmacy and Corporate. The
Pharmacy Services segment provides a range of pharmacy benefit management (PBM)
services, including mail order pharmacy services, specialty pharmacy services,
plan design and administration, formulary management and claims processing. As
of December 31, 2010, the Pharmacy Services segment operated 44 retail specialty
pharmacy stores. As of December 31, 2010, its Retail Pharmacy segment included
7,182 retail drugstores, of which 7,123 operated a pharmacy, which is its

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CVS.com, and retail health care clinics.
Mylan Inc. and its subsidiaries (MYL) is a generic and specialty
pharmaceutical company, which provides products to customers in more than 150
countries and territories. The Company operates in two segments: Generics and
Specialty. Mylan is a fully-integrated global pharmaceutical company that
develops, licenses, manufactures, markets and distributes generic and branded
generic pharmaceuticals, specialty pharmaceuticals and active pharmaceutical
ingredients (API). In September 2010, Mylan completed the acquisition of 100% of
the outstanding equity in Bioniche Pharma Holdings Limited (Bioniche Pharma).
The United States sales are derived through the wholly owned subsidiary Mylan
Pharmaceuticals Inc. (MPI), its primary United States pharmaceutical research,
development, manufacturing, marketing and distribution subsidiary, as well as
through Mylan Institutional. Mylan Institutional. The specialty pharmaceutical
business is conducted through Dey Pharma, L.P.
General Mills, Inc. (GIS), is a global manufacturer and marketer
of consumer foods sold through retail stores. The Company is also a supplier of
branded and unbranded food products to the foodservice and commercial baking
industries. General Mills manufactures its products in 15 countries and markets
them in more than 100 countries. The Company’s businesses are organized into
three operating segments: U.S. Retail, International, and Bakeries and
Foodservice. Its product categories in the United States include ready-to-eat
cereals, refrigerated yogurt, ready-to-serve soup, dry dinners, shelf stable and
frozen vegetables, refrigerated and frozen dough products, dessert and baking
mixes, frozen pizza and pizza snacks, grain, fruit and savory snacks, and a
variety of organic products including soup, granola bars, and cereal. In July
2011, it acquired 51% controlling interest in Yoplait S.A.S.
Altria Group, Inc. (MO) is a holding company. As of December 31, 2010, Altria
Group, Inc.’s wholly owned subsidiaries included Philip Morris USA Inc. (PM
USA), which is engaged in the manufacture and sale of cigarettes and certain
smokeless products in the United States; UST LLC (UST), which through its
subsidiaries, is engaged in the manufacture and sale of smokeless products and
wine, and John Middleton Co. (Middleton), which is engaged in the manufacture
and sale of machine-made large cigars and pipe tobacco. Philip Morris Capital
Corporation (PMCC), another wholly owned subsidiary of Altria Group, Inc.,
maintains a portfolio of leveraged and direct finance leases. As of December 31,
2010, in addition, Altria Group, Inc. held a 27.1% economic and voting interest
in SABMiller plc (SABMiller). As of December 31, 2010, Altria Group, Inc.’s
segments included cigarettes, smokeless products, cigars, wine and financial
services.

Covered Calls for April 2011

It is time to begin looking at the next month (April) covered calls at this time.  I have already started a short list of potential trades.  This list is most at-the-money and slightly out-of-money calls.  I have included the S&P Ranking as well as the volatility measures on the chart.  Here is the list. with company profiles below (click image to enlarge).

Get Rich Covered Calls 2011

 
 
 
 
 
 
F5 Networks, Inc. (F5 Networks) is a provider of technology that optimizes the delivery of network-based applications and the security, performance and availability of servers, data storage devices and other network resources. Its technology is hardware and software for application delivery networking, including application security, secure remote access, policy management, wide area network (WAN) optimization and file virtualization. Its principal products are systems that integrate its software with purpose-built hardware that incorporates commodity components. In addition, it introduced a virtual (software only) version of BIG-IP called BIG-IP LTM (VE) that is designed to run on servers and work in conjunction with its systems to provide management of virtual servers and applications. Its BIG-IP product family, which represents the bulk of its sales, supports a growing number of features and functions available as software modules, standalone appliances, or both.
Salesforce.com, Inc. is a provider of enterprise cloud computing applications. It provides a customer and collaboration relationship management (CRM), service to businesses of all sizes and industries worldwide and provides a technology platform for customers and developers to build and run business applications. Cloud computing refers to the use of Internet-based computing, storage and connectivity technology for a variety of different services. The Company designed and developed its offering, which can be deployed, customized and integrated with other software applications. It markets its service to businesses on a subscription basis, primarily through the direct sales efforts and indirectly through partners. In May 2010, the Company acquired Jigsaw. In January 2011, the Company acquired Heroku, the cloud platform for writing Ruby-based applications. In January 2011, the Company acquired Dimdim.
Alpha Natural Resources, Inc. (Alpha) is a coal supplier in the United States. The Company is a supplier and exporter of metallurgical coal for use in the steel-making process, and a supplier of thermal coal to electric utilities and manufacturing industries. It operates 66 mines and 13 coal preparation plants in Northern and Central Appalachia and the Powder River Basin. The Company operates in two segments: Eastern Coal Operations and Western Coal Operations. Eastern Coal Operations consists of the mines in Northern and Central Appalachia, its coal brokerage activities and the Company’s road construction business. Western Coal Operations consists of two Powder River Basin mines in Wyoming. During the year ended December 31, 2010, steam coal and metallurgical coal accounted for approximately 86% and 14% of its coal sales volume. During 2010, Alpha sold a total of 84.8 million tons of steam and metallurgical coal.
Medco Health Solutions, Inc. (Medco) is a healthcare company. It provides clinically-driven pharmacy services designed for private and public employers, health plans, labor unions and government agencies of all sizes, and for individuals served by Medicare Part D Prescription Drug Plans. The Company opertates in two segments: Pharmacy Benefit Management (PBM) and Specialty Pharmacy. Medco’s advanced pharmacy and clinical research are part of Medco making medicine for more than 65 million members. It offers clinically-based programs that identify drug waste. Pharmacy management includes mail-order service, retail pharmacy networks, specialty pharmacy management, call center pharmacies and reimbursement services. Its Internet-based services offer sites for clients and retail pharmacists that provide interactive tools. On January 29, 2010, the Company completed the acquisition of DNA Direct Inc. On September 16, 2010, Medco acquired United BioSource Corporation (UBC).
Newfield Exploration Company (Newfield) is an independent oil and gas company engaged in the exploration, development and acquisition of oil and gas properties. The Company’s domestic areas of operation include the Mid-Continent, the Rocky Mountains, onshore Texas, Appalachia and the Gulf of Mexico. Internationally, the Company operates in Malaysia and China. Mid-Continent division is focused primarily in the Anadarko and Arkoma basins. Its Greater Monument Butte is the Greater Monument Butte field area, located in the Uinta Basin of Utah. During the year ended December 31, 2010, approximately 82% of its proved reserves and 90% of its probable reserves were located in resource plays, primarily in the Mid-Continent and the Rocky Mountains. As of December 31, 2010, Newfield had proved reserves of 3.7 one trillion cubic feet equivalent. On February 11, 2010, the Company acquired some of TXCO Resources Inc. (TXCO’s) assets in the Maverick Basin of southwest Texas.
Holly Corporation is an independent petroleum refiner that produces light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. The Company’s operations are organized into two reportable segments: Refining and Holly Energy Partners, L.P. (HEP). As of December 31, 2009, it owned and operated three refineries consisting of a petroleum refinery in Artesia, New Mexico that is operated in conjunction with crude oil distillation and vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively, the Navajo Refinery), a refinery in Woods Cross, Utah (the Woods Cross Refinery) and the Tulsa Refinery; owned and operated Holly Asphalt Company, which manufactures and markets asphalt products from various terminals in Arizona, New Mexico and Texas; owned a 75% interest in a 12-inch refined products pipeline project from Salt Lake City, Utah to Las Vegas, Nevada, and owned a 34% interest in HEP.
Vertex Pharmaceuticals Incorporated (Vertex) is engaged in the business of discovering, developing and commercializing small molecule drugs for the treatment of diseases. The Company is engaged in phase-I clinical trials and/or nonclinical activities with respect to a range of additional drug candidates, including compounds intended for the treatment of hepatitis C virus (HCV) infection, cystic fibrosis (CF) and influenza. In November 2010, the Company submitted a new drug application (NDA), requesting approval to market telaprevir in the United States for the treatment of patients with chronic HCV infection.

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