(02-15-2019, 12:35 PM)NilesMike Wrote:

(02-15-2019, 10:56 AM)Otter Wrote:

(02-15-2019, 10:37 AM)NilesMike Wrote: Don't like BUD at all, their business trajectory is down. STZ is a much better buy IMO. Since BUD sold Corona/Modello to STZ it has gone from $105ish to 70ish , while STZ has gone from $80ish to 180ish

(02-15-2019, 10:11 AM)Otter Wrote: Added to BUD and T this morning.

Both appear roughly fairly valued to me. BUD is trading right at its historical average P/E, with a yield (even after the divvy cut and foreign tax) about 50 basis points higher than STZ (although STZ's recent history of raises is impressive). I also view BUD as a bet on Dollar vs. emerging market currencies reverting back to the historical mean at some point in the near future. Although it pains me to invest in them as a homebrewer, BUD is one of the 800lb gorillas in the beer space, and I think they will continue to execute well in that challenging space long-term. 

STZ is trading a bit under its 10-year average P/E of 21, but in the same ballpark as BUD. I think the current discount for STZ is the market trying to digest the impact of them making a huge bet on cannabis by spending $4B (a sizable percentage of their market cap) for Canopy. I don't know that you will see the same meteoric divvy growth going forward for STZ, at least for the next couple years. 

Frankly, I like both. I have had STZ on my watch-list for a while. Would also love to own BF.B if it ever drops to a P/E in the low 20s (one can hope). Selling booze is profitable.

I have STZ P/E at 11??

(02-15-2019, 12:35 PM)NilesMike Wrote:

(02-15-2019, 10:56 AM)Otter Wrote:

(02-15-2019, 10:37 AM)NilesMike Wrote: Don't like BUD at all, their business trajectory is down. STZ is a much better buy IMO. Since BUD sold Corona/Modello to STZ it has gone from $105ish to 70ish , while STZ has gone from $80ish to 180ish

(02-15-2019, 10:11 AM)Otter Wrote: Added to BUD and T this morning.

Both appear roughly fairly valued to me. BUD is trading right at its historical average P/E, with a yield (even after the divvy cut and foreign tax) about 50 basis points higher than STZ (although STZ's recent history of raises is impressive). I also view BUD as a bet on Dollar vs. emerging market currencies reverting back to the historical mean at some point in the near future. Although it pains me to invest in them as a homebrewer, BUD is one of the 800lb gorillas in the beer space, and I think they will continue to execute well in that challenging space long-term. 

STZ is trading a bit under its 10-year average P/E of 21, but in the same ballpark as BUD. I think the current discount for STZ is the market trying to digest the impact of them making a huge bet on cannabis by spending $4B (a sizable percentage of their market cap) for Canopy. I don't know that you will see the same meteoric divvy growth going forward for STZ, at least for the next couple years. 

Frankly, I like both. I have had STZ on my watch-list for a while. Would also love to own BF.B if it ever drops to a P/E in the low 20s (one can hope). Selling booze is profitable.

I have STZ P/E at 11??

(02-15-2019, 12:44 PM)fenders53 Wrote: What do you think of this move? ....

Sold a JUN put strike 16 for 1.15.  That's about 20% annualized.  Today I am real good with being assigned NWL at a sub $15/SH basis.  Dividend would be very good.

Sold a SEP put strike 17 for 2.10.  That's more than two years of NWL Div in my pocket today so I am feeling good with the risk reward on this one.  It's OK to disagree, but I'll move the premiums to my ultra short bond fund now. 

(02-15-2019, 01:07 PM)fenders53 Wrote: It all comes down to your confidence in the future E growth, or lack thereof.

(02-15-2019, 01:09 PM)crimsonghost747 Wrote:

(02-15-2019, 12:44 PM)fenders53 Wrote: What do you think of this move? ....

Sold a JUN put strike 16 for 1.15.  That's about 20% annualized.  Today I am real good with being assigned NWL at a sub $15/SH basis.  Dividend would be very good.

Sold a SEP put strike 17 for 2.10.  That's more than two years of NWL Div in my pocket today so I am feeling good with the risk reward on this one.  It's OK to disagree, but I'll move the premiums to my ultra short bond fund now. 

I'm not familiar with the company itself so can't comment on that part. But if you are pocketing around 20% annualized then as long as you do not get assigned it works wonders. And if you do get assigned then it all depends on what the real price is then. :p

Personally I can't use put options to enter positions, it's a decent idea and seems to be working well for you but I simply don't have the capital to buy 100 shares at a time. I would be careful though when you sell them that far into the future, that is a lot of time where something bad can happen.

I consider what I do to be trading. I never sell calls against my own positions, I buy the 100 shares and sell a call. And keep selling until one expires in the money. Or just sell a put but these are rare because I'm not a fan of the risk of it getting assigned. My trades are usually less than a week, I think the longest I've done so far is two or 3 weeks. I admit that this is a pretty risky strategy and it has backfired several times but overall the returns have been good. It's all about entering into the position at the right price and then finding a good middle ground when it comes to premium vs price appreciation.

(02-15-2019, 01:09 PM)crimsonghost747 Wrote:

(02-15-2019, 12:44 PM)fenders53 Wrote: What do you think of this move? ....

Sold a JUN put strike 16 for 1.15.  That's about 20% annualized.  Today I am real good with being assigned NWL at a sub $15/SH basis.  Dividend would be very good.

Sold a SEP put strike 17 for 2.10.  That's more than two years of NWL Div in my pocket today so I am feeling good with the risk reward on this one.  It's OK to disagree, but I'll move the premiums to my ultra short bond fund now. 

I
But if you are pocketing around 20% annualized then as long as you do not get assigned it works wonders. And if you do get assigned then it all depends on what the real price is then. :p

(02-15-2019, 01:55 PM)fenders53 Wrote: Right, but you do need the free capital in your account, or a margin account and authorization to trade naked options. Something I would never recommend as it ends bad at some point when the market turns on you. For younger traders with lower capital, the cover call still provides some opportunity to trade with a conservation strategy. That's what I did for a lot of years. I know crimsonghost already does this from time to time.

(02-15-2019, 04:57 PM)NilesMike Wrote:

(02-15-2019, 01:55 PM)fenders53 Wrote: Right, but you do need the free capital in your account, or a margin account and authorization to trade naked options.  Something I would never recommend as it ends bad at some point when the market turns on you.  For younger traders with lower capital, the cover call still provides some opportunity to trade with a conservation strategy.  That's what I did for a lot of years.  I know crimsonghost already does this from time to time.

Sentence 2 does not compute unless one is undercapitalized for the trades they are making.