Here’s where we stand with our Perpetual Income Portfolio Club positions heading into the weekend.
AMAT Oct Monthly (10/16) 63 Put
Applied Materials (AMAT) is trading lower today and down around 1% for the week. My guess is this is simple sector rotation following a big move up in semiconductor stocks this year. The company is not expected to announce earnings until Nov. 12, but this could be an upside catalyst for shares.
AMAT is trading just below the strike price of our put. If it closes below $63, we will be assigned shares and sell a call next week. If the stock closes above $63, our put will expire worthless and we will sell another one next week.
Current Stock Price: $62.76
Action: Watch put expire
CHWY Oct Monthly (10/16) 55 Call
Chewy (CHWY) shot up today on an analyst upgrade. The Jefferies analyst raised the stock to “buy” from “hold.” More importantly, the price target was upped to $100 from $59.
Our call is deep in the money and there’s no cash to be made from rolling the position. Therefore, I am recommending we allow our shares to be called away. We will sell a put next week.
Current Stock Price: $67.20
Action: Allow shares to be called away
GILD Oct Monthly (10/16) 64.50 Call
Gilead Sciences (GILD) is selling off a bit today on news that a clinical trial by the World Health Organization found remdesivir has no substantial effect on COVID-19 patients’ chances of survival or on how long patients stayed in the hospital.
This study has not yet been peer-reviewed, and Gilead released a statement saying WHO’s data appears to be “inconsistent with more robust evidence from multiple randomized, controlled studies published in peer-reviewed journals validating the clinical benefit of [remdesivir].”
We’ll have to wait and see how this plays out, but the stock is holding up relatively well. And there are plenty of reasons to be bullish on the company outside of remdesivir’s fate.
Our call is on track to expire worthless and we will sell another one next week.
Current Stock Price: $62.26
Action: Watch call expire worthless
TGT Oct Monthly (10/16) 165 Put
Target (TGT) continued its march higher this week, hitting a new all-time high today. Better-than-expected retail sales for the month of September bode well for the company, as does the upcoming holiday shopping season. It would seem consumers are ready to spend en force again after months of historically high savings.
Our put is on track to expire worthless and we will sell another one next week. If, however, TGT happens to close below our put’s strike, we will accept shares and sell a call.
Current Stock Price: $166.02
Action: Watch put expire worthless
Disclosure: I have positions or trade in and out of AMAT, CHWY, GILD and TGT.