Ronald Rutherford's  Instablog

Ronald Rutherford
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Ron holds a MSc in Financial Economics (specializing in Development Economics) from University of London and a BS in Economics from Oregon State University. He also writes a periodic blog that takes a look at the global economic factors that move the markets entitled Macro View of the Markets... More
My company:
Sabrient Systems, LLC
My blog:
The Sabrient Blog
  • Rock Solid Portfolio Trades: Sell Kronos Worldwide 0 comments
    Jun 5, 2013 9:28 PM | about stocks: WU, KRO, HTS, TRTN, ARLP, WCRX

    After hours of trying to find another stock for RSY, I had to conclude that Hatteras Financial Corp {HTS} was not good enough to add to RSY. But there are some transactions that need to be done shortly.

    Kronos Worldwide {KRO} no longer has the qualities that qualify it for the RSY portfolio. Its overall value compared to others has declined and its momentum indicators are weak. And to top it off, accounting practices are weak compared to others. The recent drop-off in price makes it harder to exit at a good price point, but as of tomorrow we will acquire its latest dividend payout of 15 cents per share. RSY recommends a total sell of 400 shares at a limit price of $15.61 and adjust it if it is weak tomorrow morning.

    Optional Options

    There are two options expiring over the next two months being: TAL Jul 20 '13 $35 Call and WU Aug 17 '13 $15 Call.
    We can wait longer for WU as the stock price difference is less than a dollar but the option is $1.70, thus wait for the time value to decrease over time. For TAL, RSY recommends a buy to cover of 4 options {all} at a limit price of $6.50, which is a premium of $0.16 over price difference.

    Here are a few more options that the current holdings might benefit from.

    1 option at $3.95 of ARLP Dec 21 '13 $75 Call

    6 options at $1.00 of STM Jan 18 '14 $10 Call

    6 options at $0.95 of WCRX Oct 19 '13 $20 Call

    Disclosure: I am long WU, KRO, HTS, TAL, ARLP, WCRX.

    Stocks: WU, KRO, HTS, TRTN, ARLP, WCRX
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