The Money Tree

Safely Generating Income in Retirement

Archive for June 3rd, 2013

New Trade – TEVA

Posted by mounddweller on June 3, 2013

Fellow Traders,

 

No, your eyes are not deceiving you and no a whole month hasn’t passed quite yet.  Yes, it’s only been one day since my last post.  This is my first effort to try to get better at writing more often and in a more timely manner relative to my trades.

So, here goes.  In my post yesterday I mentioned I was interested in TEVA.  Today, while TEVA was bouncing around just above and below $38, I decided the time was ripe to sell JUN puts at the $37.50 strike.  I put in a STO limit order on 3 contracts at $0.42.  A short time later my order filled when the underlying was trading at $37.97.

With only 19 days to expiration my ROIC is 1.12%.

This is my second trade in TEVA.  Last month I executed the same trade.  Those options expired OTM.  My objective with these trades is to acquire a block of shares in TEVA for my long-term portfolio.

TEVA is a pharmaceutical manufacturer.  It is headquartered in Israel.  It is the world leader in the manufacture of generic drugs.  It also manufacturers its own patent protected, proprietary drugs.  It is about to lose a patent on one of these drugs.  This has caused the stock to fall significantly.  The stock peaked at $63.75 in March 2010.  It bottomed out at $35.26 in September of 2011.  Since then it has bounced between $45 and $37.

The stock currently yields 2.8%  Over the past five years it has consistently raised its quarterly dividend from $0.13 to $0.32.  My intent is to acquire shares while it is out of favor and begin to collect its ever rising dividend.  When growth returns it will return to favor and the price will go back up.

That’s it for now.  I’ll be back later this week if I place any more trades.  I still have my eye on CHRW.

Regards,

Troy

 

 

 

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