This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

A Media Portfolio for Long-Term Investors

Stocks in this article: NFLXPSIRIRCIBCETWXMSG

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- I have spent a considerable portion of the last week discussing several media stocks on TheStreet. My article history contains stories that explain why I am bearish Netflix (NFLX) and Sirius XM (SIRI) and bullish Bell Canada (BCE), Rogers Communications (RCI), Time Warner (TWX), Madison Square Garden (MSG) and Pandora (P).

In this article, I outline a portfolio of media stocks that could work for some long-term investors who like to speculate a little and use options frequently, but conservatively as part of a growth-and-income portfolio. These are the same types of strategies we discuss each week with subscribers in my Options Investing Newsletter. As always, use these ideas as a starting point for your own research. Your unique circumstances might warrant a different approach.

Ultimately, I hope to illustrate how to work options into your portfolio at a basic, but worthwhile and productive level. You might use different stocks or methods to achieve similar goals.

Follow TheStreet on Twitter and become a fan on Facebook.

In a portfolio like this, I want to keep a core of about 75% to 80% in dividend-paying growth stocks. In the remaining 20% to 25%, I take things in a progressively speculative direction.

Core (Initial Positions)

  • BUY 100 to 500 shares of BCE
  • BUY 100 to 500 shares of RCI
  • BUY 100 to 500 shares of TWX
  • Your amount of available capital, time horizon (when you'll be needing your money) and risk aversion dictate how much money you can put into your initial positions. Ideally, I strive to write covered calls against each position. Your broker's commission structure influences whether or not it makes sense to execute covered calls.

  • >>Also see: Why I Am Long Time Warner
  • Additionally, you might set different strike prices or choose different expiration months on the basis of your near- and long-term sentiment. In addition, you'll have to factor in the risk that your shares could be called away and decide on a level of risk that's appropriate for you. As of Tuesday's close, with all three stocks up sharply, I would consider proceeding as follows:

    Write the TWX May $30 calls

    I would prefer to take the same approach with BCE and RCI, but with liquidity and the availability of strike prices a bit of an issue, I would refrain. Instead, as a potential alternative to buying BCE and RCI stock outright and directly, I would consider getting long via writing cash-secured puts on each name. I presently own BCE shares, but I am also short a BCE May $40 put.

  • >>Also see: Why I Am Long Rogers and Bell
  • 1 of 2

    Select the service that is right for you!

    COMPARE ALL SERVICES
    Action Alerts PLUS
    Try it NOW

    Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    • Weekly roundups
    TheStreet Quant Ratings
    Try it NOW
    Only $49.95/yr

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    • Upgrade/downgrade alerts
    Stocks Under $10
    Try it NOW

    David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    • Weekly roundups
    Dividend Stock Advisor
    Try it NOW

    Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Alerts when market news affect the portfolio
    • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
    Real Money Pro
    Try it NOW

    All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

    Product Features:
    • Real Money + Doug Kass Plus 15 more Wall Street Pros
    • Intraday commentary & news
    • Ultra-actionable trading ideas
    Options Profits
    Try it NOW

    Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

    Product Features:
    • 100+ monthly options trading ideas
    • Actionable options commentary & news
    • Real-time trading community
    • Options TV
    To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
    Submit an article to us!
    DOW 17,810.06 +91.06 0.51%
    S&P 500 2,063.50 +10.75 0.52%
    NASDAQ 4,712.97 +11.1030 0.24%

    Brokerage Partners

    Rates from Bankrate.com

    • Mortgage
    • Credit Cards
    • Auto

    Free Newsletters from TheStreet

    My Subscriptions:

    After the Bell

    Before the Bell

    Booyah! Newsletter

    Midday Bell

    TheStreet Top 10 Stories

    Winners & Losers

    Register for Newsletters
    Top Rated Stocks Top Rated Funds Top Rated ETFs