Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev | Next
Author: StevnFool Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 214649  
Subject: Re: ot: stx procrastination Date: 9/11/2012 6:23 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Current earnings at $9ish are perhaps a little above trend, and if they
slide a bit coming off that peak it might hit the price a bit more,
but I certainly expect EPS to average over $6 in the next few years.
At 5x trend earnings it can dip in price for a while and I won't bail out.
It's my 3rd biggest position now.
I tend to keep "big four" and the dozen dwarfs.


I looked at the earnings trend today and put $4 down as a "safe looking" figure for sustainable EPS. I used that (plus the safe looking balance sheet) to come up with an easily justifiable value of $50+.

I had previously written some Jan 2014 Strike 22 Puts for a premium of $5.10.

Today I wrote some more Jan 2014 Strike 30 Puts for a premium of $7.25. If put to me, a net cost of entry of $22.75 should have a satisfactory outcome if the value is conservatively over $50.

My total capital committed to STX is still less than my typical position, but I will probably write some more puts soon - maybe if we get a big down day.

On another note, I'm thinking of transferring some more EUR savings to my USD funds to take advantage of the recent runup in EUR/USD which I am assuming is something rather temporary.

StevnFool
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement