Hello Friends, happy early holiday season to everyone. I was looking back at some of my articles, and I want to give a recap of one that was exactly 6 months old as of April 2, 2012.
The stocks we discussed back then were Borg Warner (BWA), Sherwin Williams (SHW), J. M. Smucker & Co. (SJM), and Diageo (DEO). Let's go over them 1 at a time, and see if we should be selling, writing covered calls, and how to play with these gains.
Borg Warner was at $74 when I recommended it, and now currently trading at $86. I think it has more room to go, most probably to $100 now that people are buying cars again. If you have a nice profit in the stock you can write the 90 strike of July and grab 3.7% premium. Losing it at $90 is fine, we will find something else to spend that money on.
Sherwin Williams was at $82.15 when I recommended it, and now it trades at $110. It has seen a 33% run in the past 6 months, and that starts to creep into my danger zone. I know that spring/summer is coming and people are fixing up their homes and doing it themselves, but I am going to err on the side of caution. Let's grab $3 for the May $110 strike price and take the profit off of the table. Put a stop in at $105.
J. M. Smucker & Co was at $77 when it was recommended. It is trading at $82 plus a 2.4% dividend. Not the greatest mover in the market, but steady. I am reluctant to do anything here, as this is a core holding and should remain that way. I would buy into weakness, of which there seems to be none, and if it runs to $85 and you are bored of the lackluster gains, we can always move into something else.
Diageo PLC was at $81.50 back in November 2011 and currently trades at around $100. It has been a real fan favorite; people are constantly drinking. Warm weather is coming and the market is flying, so I would imagine things will remain the same. A 23% gain is a nice return for 6 months, I am just fearful if we start writing calls on this beauty, it will run to $125 in a flash. The stock does not have great option writes to begin with, so I think that letting this ride a little longer will prove to be more profitable.
I will go through some more of my articles that I wrote around 6 months ago, and guide you into some profit-taking as the election gets closer, I would have to imagine people will take some profits with any possible uncertaintly of a change at the top.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.