Playing Options With CBL & Associates

| About: CBL & (CBL)

CBL & Associates Properties (NYSE:CBL) yield: 6%
Dividend amount: $0.21
Ex-dividend sate: September 28
Beta: 3.31

In combination with my buying the stock and after checking company updates, offer to sell the October $12.50 strike call for $0.43 over the intrinsic value. The option may get exercised early for a gain. If not, after qualifying for the dividend, I will look to close out the covered option with a gain of about $0.03.

The P/E ratio has been under pressure, as the current trailing 12 months (ttm) P/E ratio is 28, while the forward P/E ratio is now 6.3. It appears based on the lower PE that investors are pricing in less growth. The current book value per share is 8.66. For the same fiscal period year-over-year, revenue has declined to $1.07 billion for 2010 vs. $1.08 billion for 2009. The bottom line has rising earnings year-over-year of $62.15 million for 2010 vs. $-14.99 million for 2009. The company's earnings before income and taxes are rising with an EBIT year-over-year of $370.50 million for 2010 vs. $280.01 million for 2009. At $13.37, the price is currently below the 200-day moving average of 17.35, and below the 60-day moving average of 16.62. The stock has fallen in price 2.64%, with a one-year change of 9.03%. Comparing to the S&P 500 price changes, the price performances are -8.97% vs. the S&P 500 from a month ago, and year to date difference is -16.06% vs. the S&P 500 price change.

As I always point out, my last step (completed before making a trade on the same day) is to check company announcements, and news sources for possible events that may cause the stock price to move. This is especially important during earnings season.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in CBL over the next 72 hours.