I do own it but sell call options against my position because I believe at this price it is a hold at best.
However, the price is down around 20% from its recent high so if they report a bad quarter it shouldn't fall too much and any selloff could present a good entry point.
The other day I sold put options against CVX so if it drops to 90 I'm required to buy it but I keep the option premium regardless.
'NEW YORK (TheStreet) -- Shares of Chicago Bridge & Iron (CBI - Get Report) were falling 14.6% to $32.87 Friday following reports that the construction company will delay the building of a new nuclear power plant for Southern Co. (SO) .
The new nuclear power plant at Plant Vogtle will be delayed by 18 months, according to the Associated Press. Chicago Bridge & Iron and Westinghouse Electric expect to have the first reactor at Plant Vogtle completed by mid-2019, with the second reactor coming online in mid-2020.
Southern Co. is currently in litigation with Chicago Bridge & Iron over previous delays and cost increases for the project/'".
No big deal-I bought some in two of my IRAs today but very small positions.
I sold 1/3 of my shares in IRA #2 to free up some cash just in case another stock I bought today falls another 10%--CBI. It's down from 89 to under 33 as of today. Berkshire owns a small 10.7 million share position in it.
MO is now priced at over 20 times next years earnings and has a dividend yield under 4%. Every time I sell some it tends to go up so next stop is 60.
I'm not selling any shares in my personal account regardless of price.
Three of us bought more today and I also sold put options that obligate me to buy even more if it falls under 30.
Now yields 2.6%. In a taxable account you may be earning less than the inflation rate.
Buyers should be required to sign their buy orders indicating they understand interest rate risk. My Great Aunt lost 40% of her retirement funds during the Johnson administration and she was invested in bonds.
"Chevron to suspend share repurchases"
This is why companies should be more cautious and frugal about buying back their own shares. Unpredictable things can happen and your share price drops 20-50% overnight.
Bought a Berkshire Holding today--CBI in IRA #1 and 2 under $33/share. BRK owns 10.7 million shares as of Nov of 2014.
The stock is down from 89 last March to under 33 today.
At 65, in my opinion the share buybacks become beneficial to existing shareholders. Perhaps today we'll see it trade there.
They should earn $5.5 per share next year so under 65 would put it at 12 times earnings. If it drops under 55 I'll buy some for my IRAs.
I'm currently long shares in my farm account and two of my personal accounts but I'm short both covered and naked call options against my holdings so I'm down about 5-7 dollars per share today. And I'll continue to sell call options next month after February options expire.
When I invested in this stock years ago it was $40/share and had $10/share in net current assets. Now they have about $16 in net current assets minus all liabilities.
Stock Repurchase Program
"During the third quarter of fiscal year 2015, the Company repurchased approximately 157,000 shares of its common stock, at an average price of $84.69, for a total of $13.3 million under its stock repurchase program. As of December 31, 2014, the Company had $66.0 million authorized repurchase funds remaining under its $200.0 million stock repurchase program announced in July 2012. Depending on market conditions and other factors, such repurchases may be commenced or suspended at any time without prior notice."
Good job management-keep over paying for your stock that earns 90% of its earnings in the Dec quarter and never pays a dividend. Why not pay 17 times earnings? Maybe with a little luck they'll be issuing new shares after a bad year next year under $40/share.
Have you noticed that both RAI and LO both pay the same monthly dividend and that historically they both raise it in February? What will they do this year?
I'll go with a raise to $.64/share/quarter.
Apple® today announced financial results for its fiscal 2015 first quarter ended December 27, 2014. The Company posted record quarterly revenue of $74.6 billion and record quarterly net profit of $18 billion, or $3.06 per diluted share. These results compare to revenue of $57.6 billion and net profit of $13.1 billion, or $2.07 per diluted share, in the year-ago quarter. Gross margin was 39.9 percent compared to 37.9 percent in the year-ago quarter. International sales accounted for 65 percent of the quarter’s revenue.
AAPL is a $$$$ making machine. Amazing!
GOOG issues new shares and pays no dividend and it doesn't do share buybacks, so I'll take GOOG. But AAPL has a huge lead and it wouldn't take much to put them over the top ,but they do pay dividends and buy back massive amounts of stock both good for shareholders but not for the race to $1 trillion.
I own T and VZ and use them as substitutes for bonds but I also sell call options against them both.
This strategy is perfect for IRA investments.