Today I would like to focus our attention on one of the world's biggest shipping companies,
. I have been tracking this stock for a long time, but have not yet been able to find the right time to buy deep-in-the-money call options with a small enough premium that fits my targets.
But now I have.
With operations throughout the world, FedEx benefits from the weakness of the dollar; each dollar of revenue earned abroad reflects more favorably on its balance sheet. Other highlights of this company's position: It has a forward P/E of 13.50, revenue of $35.8 billion, cash on hand is over $1.1 billion and debt-to-equity is right at zero.
Although the company recently lowered its forward outlook, the negativity has been built into the stock price, so I am going to buy 10 of the April $90.00 (FDXDR) DITM calls for $18.50, or better. This stock is an excellent example of the power of DITM calls: If we get filled, this would mean that we would be in control of 1,000 shares of a solid stock all the way out until April 18, 2008. (The stock closed Friday at $106.06.)
Think about that leverage. That is the beauty of my strategy; it is simply a way to buy, or control, stocks for approximately 20% of FedEx's common stock price. Let the public pay full price, not us! At the end of the day, this is simply a "stock replacement plan."
Game of Life
The anomaly that is the Arizona Diamondbacks, will be playing for the National League Pennant. The D-Backs had the dubious distinction of having the lowest team batting average in the NL, as well as scoring less runs overall than their opponents during the regular season.
Despite these less-than-desirable attributes, which invariably translate into losing seasons, Arizona, with its outstanding pitching and uncanny ability to manufacture runs, achieved the best record in the NL this year.
The script did not change as they swept Lou Piniella's Chicago Cubs, 3-0, in the NL Divisional Series, thereby ensuring that the long-suffering Cubs fans will have to wait at least a century between World Series appearances.
The Diamondbacks' opponent in the NLCS is their divisional rival, the Colorado Rockies, who seem dedicated to providing the impetus for the words of John Denver's signature song to ring true with their fan base.
The Rockies, enjoying a magic carpet ride over the past three weeks, have won 17 of their last 18 games, including a three-game sweep over the Phillies, in their divisional series.
Everybody expected the Rockies, with their potent line-up, to hit, but precious few could have expected the pitching performances they received from their young arms against the powerful Phillies bats.
In the American League, the Red Sox swept the Angels, as my former teammate Curt Schilling pitched seven scoreless innings in Game Three. The BoSox received a walk-off blast from Manny Ramirez in the bottom of the ninth on Friday, as well as another moon shot yesterday from Manny, which completed the back end of back to back homers with David Ortiz.
With Ramirez now back in the order to protect Ortiz, the boys from Beantown look quite formidable, particularly given their starting pitching, coupled with Jonathan Papelbon to close out games.
Their opponent for the AL Pennant remains to be determined, as the Yankees defeated the Indians last night, thereby avoiding a sweep. The Rocket, who was clearly low on fuel secondary due to his hamstring injury, lasted only 2 1/3 innings, but fittingly struck out the last batter he faced, which may in fact be the last batter he ever faces.
Fortunately for the Yanks, NASA was able to send up a few young astronauts, Philip Hughes and Joba Chamberlain, to salvage the mission. Despite a four-run lead in the ninth, manager Joe Torre brought in the old Space Cowboy, Mariano Rivera, to seal the deal. Nonetheless, the Bronx Bombers face an uphill battle, in that they must defeat the Indians in the next two games.
In the NFL, the Patriots and Colts remained undefeated with relatively easy victories. The Chargers returned to the victory column by force feeding LaDainian Tomlinson to the Broncos, sparking a 41-3 rout. Last year's feel-good story, the New Orleans Saints, remained winless after a loss to the Carolina Panthers.
This year's feel-good story, Brett Favre and the Green Bay Packers, were knocked from the ranks of the unbeaten by last year's Super Bowl losers, the Chicago Bears. Favre, who broke the career record for touchdown passes last week, tied George Blanda's career record for interceptions this week. With the victory, the Bears may well have saved their season.
Upsets continue to abound on the college gridiron, as four teams in the Top 10 lost over the weekend. Prior to this collegiate football season, Jim Harbaugh, the new head coach at Stanford, anointed USC the best team in the country, and possibly "the best team in the history of college football."
On Saturday, on USC's home field, Stanford, a 41-point underdog, succeeded on two fourth down conversions, the last one resulting in a touchdown, with time running out, to beat the Trojans 24-23 in a colossal upset.
Danny Woodhead is an undersized running back, who despite having a stellar high school career, was not recruited by any major collegiate program. Not to be denied, Woodhead enrolled at Chadron State, a Division II college in Nebraska. On Saturday, Woodhead broke the NCAA all-divisions career rushing record with 7,441 yards, shattering the previous mark of 7353 yards, established by R.J. Bowers of Division III Grove City (Pa) College from 1997-2000.
The Players Club recognizes and appreciates the accomplishments of those who may not play on the biggest stage. Regardless of the venue, Woodhead's career numbers are astonishing, and it is not out of the realm to see him playing on Sundays next year in the NFL. By guaranteeing recurring cash flow through our strategic partner, The Players Club endeavors to ensure that the investment in one's career translates into an ongoing investment for life.
Life is a journey. Enjoy the ride!
At the time of publication, Dykstra had no positions in stocks mentioned.
Nicknamed 'Nails' for his tough style of play, Lenny is a former Major League Baseball player for the 1986 World Champions, New York Mets and the 1993 National League Champions, Philadelphia Phillies. A three time All-Star as a ballplayer, Lenny now serves as president for several privately held businesses in Southern California. He is the founder of The Players Club; it has been his desire to give back to the sport that gave him early successes in life by teaching athletes how to invest and protect their incomes. He currently manages his own portfolio and writes an investment strategy column for TheStreet.com, and is featured regularly on CNBC and other cable news shows. Lenny was selected as OverTime Magazine's 2006-2007 "Entrepreneur of the Year."