Another month – another update!
|Helmerich & Payne||HP||20||$48.92||2017-09-13||$978.40|
|Sabra Health Care||SBRA||44||$20.67||2017-10-25||$909.48|
|Stock||Open Date||Exp Date||Type||Strike Price||Premium||Fees||Exit Price||Closing Date||P/L||Annualized|
I’ve added some shares to my new initiated position in Helmerich & Payne because I see the oil price stabilized and the oil price environment (demand/supply) more positive going forward. My portfolio is already very energy heavy, but I don’t just want to wait for the better times to see my underwater positions going back into the green, but I also want to take some opportunity here.
Same with the new position in Uniti, a communication REIT. From Bloomberg:
It operates in four business segments: Leasing, Fiber Infrastructure, Towers, and Consumer CLEC. The company engages in the acquisition and leasing of mission-critical communications assets, such as fiber, data centers, consumer broadband, coaxial and upgradeable copper assets
Highly speculative, because the biggest customer (70% of revenue) Windstream has a higher chance of going into bankruptcy. In hindsight I was way to early to jump the yield-sucker train. My original plan after my purchase was to add in the low 13s again, but this time I decided to try out selling a cash secured put. I was always reading about this strategy but never tried it myself. As this is a highly speculative position I also wasn’t to eager to add again, so I decided to sell a slightly “in-the-money” Put instead, which also would result in an even lower price: $15 (strike price ) – $2.44 (premium) = $12.56. I also added an order to close the option at $1.1 which already happened yesterday. Subtracting the fees (2x$3.5), I made $127 in 18 days. I will continue to evaluate the use of option writing, but I still need a lot of practice (no experience in selling covered calls and rolling options).
I also initiated a new position in CVS Health, a dividend contender with 14 years of an increasing dividend. I like the dividend yield (2.71%), the payout ratio (39.84%) and the difference from the historic dividend median yield from the last 13 years (1.18%). The price was driven lower because of the rumor about amazon entering the pharmacy space. Yesterday it was confirmed. Additionally I read yesterday that CVS wants to buy Health insurer Aetna (AET) for $66B. I have to read further details, but just by the look of the market cap of CVS (74.524B) the news itself will be a material change in valuation of the company (in every aspect). I’m curious to see the details of this offer and how the market will react to it. But I’m sure I’ve to evaluate the position again.
I’ve added 44 shares to my Sabra Health position. In August I wasn’t sure what to do with the CCP / SBRA merger. In the meantime Sabra was busy and I like all of the actions of the management (Enlivant and TPG acquisition, disposing its entire Genesis stake, capital raise through share offering and not taking new debt). This will result in a slightly lower guidance for AFFO, but with a much better diversification and risk profile. This could also lead to additional credit upgrades. I also consider adding below $19 or maybe writing another cash secured Put.
My last update includes a new position in Celgene which I initiated yesterday on the legendary -21% intraday drop caused by a slightly reduced guidance. Celgene is a biotech company which unfortunately doesn’t pay a dividend. However, I’m watching CELG for a long time and wanted to add it to my portfolio before as I’m a fan of biotechs and healthcare in general.