Here’s where we stand with our Perpetual Income Portfolio Club positions heading into the weekend.
AAPL Mar Week Four (3/26) 125 Call
Apple (AAPL) struggled following a pop early in the week. The issue is with the stock, not with the company. Apple and other pricey tech stocks were hit as bond yields rose and investors rotated out of the sector. This won’t be the case forever, and we’ll continue generating income while we wait for money to rotate back into quality tech stocks like Apple.
Our call does not expire for another week, so we are simply watching and waiting for now.
Current Stock Price: $120.30
Action: No action is needed at this time
CHWY Mar Monthly (3/19) 90 Call
Chewy (CHWY) continued to bounce around the $80 level this week. While the lack of sustained upward movement is frustrating, I was encouraged this week by Petco Health and Wellness Company’s (WOOF) first earnings report since going public in January. Petco reported stronger-than-expected fourth-quarter earnings, with the company’s CEO, Ron Coughlin, saying it is benefiting from a new-pet trend spurred by the coronavirus pandemic.
“It’s not like a home gym that you get, and then you don’t get another one for 5, 10 years. You’re going to have to feed, groom, vaccinate that pet for the next decade, so it’s an annuity for our business,” Coughlin said.
Chewy is benefitting from the same trend as Petco. And while the companies are competitors, I am not worried one bit about Petco having a meaningful impact on Chewy’s profits.
Our call is on track to expire worthless, and we will sell another one next week.
Current Stock Price: $81.71
Action: Watch call expire worthless
GLW Mar Monthly (3/19) 40 Put
Corning (GLW) has bucked the sell-off in tech stocks (although it’s not a tech stock per se) and has outpaced the broader market so far in 2020. GLW is up 14.6% year to date, easily outpacing the S&P 500’s 4.2% gain.
Our put is on track to expire worthless, and we will sell another one next week. If the stock happens to close below $40, we will accept shares and sell a put.
Current Stock Price: $41.25
Action: Watch put expire
SBUX Mar Monthly (3/19) 107 Put
Starbucks (SBUX) is not just a pandemic survivor but a re-opening play. The stock received an analyst upgrade this week based on a belief that customer visits would reach pre-pandemic levels once the COVID-19 vaccine is widely available. The Cowen Equity Research analyst rates the stock “outperform” and upped their price target from $112 to $120.
We are on track to be assigned share and will sell a call next week.
Current Stock Price: $106.34
Action: Accept shares
Disclosure: I have positions or trade in and out of AAPL, CHWY, GLW and SBUX.