The Money Tree

Safely Generating Income in Retirement

Posts Tagged ‘ABB’

Potential April Trades

Posted by mounddweller on April 18, 2009

Well, another trading month has come and gone.  I have spent a considerable amount of time using Visions today looking for potential new May expiration trades.  Unfortunately, the 6-week bear market rally has significantly altered the risk/rewared ratio.  I found nothing this afternoon that jumped off the page at me and screamed “AWESOME TRADE, BUY ME!”

Rather, I found a lot of quality stocks trading north of their Buy Limit (BL) and 50-day MA.  Thus, I think I’m going to keep my powder dry for a few days and see what transpires as we continue through earnings season. 

However, all that being said, I will still share with you what stocks made it into my final stage of analysis.

Current Price  $            15.36  $            46.60  $            22.98  $            80.10
Market Cap.  35.06B   5.74B   6.93B   7.96B 
P/B 3.12 2.41 1.69 3.98
Net Profit Margin 8.93% 3.65% 22.01% 16.99%
P/E 11.29 13.2 8.32 19.71
PP/E 14.91 13.02 6.62 13.93
ROA 10.00% 10.71% 13.04% 15.67%
ROE 28.39% 20.19% 22.41% 21.78%
Bare Cash/Share  $              2.36  $              6.06  $              7.26  $              4.45
Debt/Equity N/A N/A N/A N/A
Oper. CF 3.96B 539.01M 1.07B 516.2M
Lev. CF 2.36B 442.77M 324.56M 317.99
CP rel. MA        
20-day EMA Higher Higher Higher Higher
50-day EMA Higher Higher Higher Higher
200-day EMA Lower Lower Lower Lower
Trend of MA        
20-day EMA Up Up Up Up
50-day EMA Up Up Down Down
200-day EMA Down Down Down Down
MA rel. Each Other        
20-day EMA >50 >50 <50 <50
50-day EMA <200 <200 <200 <200
200-day EMA >50 and 200 >50 and 200 >50 and 200 >50 and 200
Vision V Parameters        
BR -0.74 -1.6 1.58 -2.99
TAI -1.61 -3.59 3.2 -6.01
Gold $ 100 100 100 98
BL > CP No No Yes No

As denoted by the green highlights, FRX was the overall winner in my filtering and ranking process.  If I didn’t already have a sizable position in FRX I would be tempted to enter a new trade in it.   For those of you who dieing to put new money to work here is the FRX trade I like best.

Execute a buy/write on FRX and FRXEX (MAY 22.50) at $21.58 or better.

I also looked at several ETFs.   The two I liked the most were the Oil Service Holders (OIH) and the SPDR S&P Metals and Mining (XME).  If we get a pullback over the next week or so I may consider a new position in either one of these.

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Update on Potential February Trades

Posted by mounddweller on February 20, 2009

Well, weren’t the last 4 days fun?  Not!  As promised, here’s an update on the potential trades I referenced in my earlier post.

Covered Calls

(1) Stryker (SYK) – Well, this one fell much like everything else in the market.  It now has fallen to the bottom of the Groenke V and has a TAI status of GR (get ready), and a Gold $ score of 70.  On the plus side it has a good BR (buy rank) of 5.05 and is well under the BL (buy limit) of $44.03 .   I’m going to keep it on my watch list.  A rally in the market would quickly rekindle my interest in establishing a position in SYK. 

(2) ABB (ABB) – The situation with ABB is similar to Stryker.  The market sell-off has pushed it down and it is now just below the bottom of the Groenke V.  It now has a TAI status of GR and a Gold $ score of 40.  I’ll keep it on my radar screen for a potential CC play in the future.  A more immediate opportunity (albeit with more risk) might be to sell the Mar 10 puts for around $0.25-0.30.  Note: this NP trade wouldn’t meet Ron’s criteria.

(3) Analog Devices (ADI) – This one still remains a viable candidate.  Even with the market setting new lows ADI still remains inside the Groenke V, has a TAI status of TA (take action), and a Gold $ score of 70.  Further, it has a reasonable BR of 3.00 and at $19.30 is under the BL of $20.76.  A couple up days would make this an almost perfect set-up for a successful CC trade.

(4) Activision Blizzard (ATVI) – Activision is much like the first two, SYK and ABB.  It has fallen to the bottom of the Groenke V and is rated GR.


(1) XLK – It seems I have to  keep repeating myself.  XLK has now fallen below the Groenke V and has a TAI status of GR.  Hopefully the market will turn around soon.

(2) EWZ – I still like EWZ.  It is just inside the bottom leg of the Groenke V, has a TAI status of TA, and a Gold $ score of 70.  It very much is like ADI.  A couple day rally could present a very nice entry point for a CC trade.  Impatient and more aggressive traders might consider selling March NPs as there are several at various strike prices with enticing premiums.

(3) XME – This one has an interesting chart.  Like the others we’ve discussed, it is now outside the bottom leg of the Groenke V and has a TAI status of GR.  What makes XME different and interesting is that it isn’t a sharp price drop that has caused it to drop out of the V.  Rather, it moved outside the bottom leg because it has been moving sideways for so long.   Looking at the available option chains reveals many potential CC and/or NP trades.   This one intriques me, despite not meeting Ron’s criteria.

Well, that’s it.  As you know from my earlier post, I pulled the trigger on my XLE put trade.  So far so good.  Even with the steep sell-off I’m still well north of my $39 strike price.  I’ll be back later this weekend with an update on my January trades and other open positions.



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Potential February Trades

Posted by mounddweller on February 16, 2009

Well, here we are just 4 trading days left before expiration on Friday.  I’ve started looking at potential trades for February.  Who knows what will happen between now and the market close on Friday but here’s what looks interesting to me right now.  These trades are listed in my order of preference based on various fundamental and technical indicators as well as perceived risk.

Covered Calls

(1) Stryker (SYK) – Great Balance Sheet, Recession resistant business, and a very nice looking chart.

(2) ABB Ltd (ABB) – Solid Balance Sheet, and a timely infrastructure play (think “stimulus” package).

(3) Analog Devices (ADI) – Great Balance Sheet, bad news appears to already be priced in.  We’ll find out after market close on Wednesday.

(4) Activision Blizzard (ATVI) – Great Balance Sheet, most aggressive idea.

ETF Covered Calls 

(1) Technology Sector SPDR (XLK) – CSCO, INTC, GOOG, MSFT, T, VZ all in one trade; what’s not to like!

(2) iShares MSCI Brazil Index (EWZ) – in my opinion the least risky of the emerging markets. 

(3) SPDR S&P Metals & Mining (XME) – chock full of beaten down commoditiy and mining companies.

Naked Puts

(1) Energy Select Sector SPDR (XLE) – like it again this month.

As I mentioned above, these are my POTENTIAL trades for February.  Who knows what any of these will look like by Friday.  

I’ll be back with another post after the market close on Friday.  I’ll update you on the potential February trades outlined above and give you some ideas on what I will be looking at going into the weekend.  In addition, I’ll let you know how my January picks turned out.

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