The Money Tree

Safely Generating Income in Retirement

Posts Tagged ‘JEC’

Position Update – JEC

Posted by mounddweller on June 5, 2009

I closed out my position in JEC this morning by BTC JUN $35 puts for $0.05.  Why did I do this?  Simply because the risk in the stock falling was higher than the additional return to be gained ($0.05/share) with another two weeks remaining to expiration.  Doing so also releases another $7000 (these were cash secured puts) for any other trading opportunities that present themselves over the next two weeks.

So how did I do on this trade.  Well, let’s look at the numbers.  I sold 2 puts back on 5/11 at $1.25, netting $239.53 after commissions.  I bought them back on 6/5 at $0.05, paying $20.45 total with commissions.  Thus, I ended up making $219.08.  Since this was a CSP transaction my ROIC was ($219.08/$7000.00) or 3.13% in 25 days, yielding an annualized ROIC of 45.69%.  The table below presents these numbers in a more organized fashion.

 JEC transactions


Posted in Portfolio Updates | Tagged: , , | Leave a Comment »

New NP Trade

Posted by mounddweller on May 11, 2009


I jumped the gun a little this month.  Instead of waiting for May expiration before writing any new options I saw an opportunity in the pricing of June JEC puts and decided to take advantage of it.  You may recall JEC was one of the four stocks I analyzed and considered for a May trade.  Since then the stock has reversed course and lost about 15% from where it had been trading.  Previously when I was considering JEC it was trading at $46.60.  Today it is trading at $40.25 or so.

I like to write NPs when the stock has sold off some.  So today I jumped on the opportunity to sell the JUN 35 puts (JECRG) at $1.25.  Here’s what I like about this trade…First, as I mentioned earlier the stock has already sold-off around 15% from where it was about a month ago.  JEC has to fall an additional 13.15% before hitting my strike price and 16.25% before hitting my break-even price of $33.75.  Second, my ROIC is 3.57% with a holding period of just under 5 weeks.  Third, if JEC continues to decline and I end up owning them at $33.75 I will be holding a stock with strong prospects for future earnings growth (it has a record backlog of orders), an excellent balance sheet (over $6/share in bare cash), and it’s cheap (around 11 times predicted earning at my net cost of $33.75).

Below you’ll find my trading plan evaluation criteria spreadsheet for JEC and a Groenke Vision V price chart.

JEC eval criteria

JEC price chart

Posted in Troy's New Picks! | Tagged: , | Leave a Comment »

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.

Posted in Potential Trades | Tagged: , , , , , , , | Leave a Comment »