New Positions: F and WIN

After I unwound ABT, I started to look for a new position immediately.  Also, as I wrote about last week when I posted about the new FB position, I believe the portfolio needs diversity in the form of 12 to 16 positions, so I decided to break the funds I had available into two positions.  Now I have 11 in play, not quite where I want to be but as the capital comes available from future assignments I will make things right.

This time I went with two lower price per share stocks, one of which (WIN) pays a 12% yield in dividends – so simply buying and holding will make my goals, as long as that dividend holds.  Although I sold an in the money covered call, my plan will be to roll this out to continue collecting dividends and picking up extra cash from the premiums.

Here is the analysis of the two new positions, net of fees and commissions.

F

Transactions

Bought 500 shares at average share price $15.32 (total $7,662.00)
Sold 5 16 May 2014 covered calls

Net Profit:

1) Options Income: $126.73
2) Dividend Income: $62.50
3) Capital Appreciation if assigned at $16.00:  $320.00

Total Net Profit if assigned and dividend collected:  $509.23
Absolute Return on Investment: ($509.23/$7,662.00) = 6.65%
Annualized Return if Assigned (75 days):  6.65%*(365/75) = 32.34%

WIN

Transactions

Bought 1,000 shares at average share price $8.12 (total $8,117.00)
Sold 10 8 May 2014 covered calls

Net Profit:

1) Options Income: $220.50
2) Dividend Income: $200.00
3) Capital Appreciation if assigned at $8.00:  -$135.00

Total Net Profit if assigned and dividend collected:  $285.50
Absolute Return on Investment: ($285.50/$8,117.00) = 3.52%
Annualized Return if Assigned (75 days):  3.52%*(365/75) = 17.12%