Dykstra: Hey Abbott!

It's a good fit for a deep-in-the-money calls strategy. Plus, Amgen and FPL.
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The baseball season has begun, and the gaudy numbers that invariably accompany the season's first several weeks are evident in the box scores. Despite my

previous assertion that early season statistics can seemingly change as quickly as a chameleon, it is still exciting to note what the standings reveal at this point.

Recall that last year, my Mets were within a half game in the National League wild-card race at the end of August. Unfortunately, with a less-than-stellar September, the Mets eventually finished six games behind in the wild-card race. Nonetheless, with last year's acquisition of Pedro Martinez and Carlos Beltran, there was reason for optimism moving forward.

Not resting on their laurels, the Mets set out to fill their holes and establish themselves as bona fide contenders for the National League East Championship. To that end, they obtained Paul Lo Duca, Carlos Delgado and Billy Wagner during the off-season. Well, with a little more than one-sixteenth of the season completed, look who sits atop the standings in the NL East: the New York Mets.

Granted, directly behind them are the Atlanta Braves, with their formidable 14 consecutive NL East titles in tow, poised to step on the gas when the opportunity arises. Regardless, I am happy to see the Mets' off-season moves paying some early dividends.

Speaking of dividends, look who's leading the National League in strikeouts: none other than that cagey veteran Tom Glavine. The mix of the aforementioned acquisitions, Glavine's savvy, leadership and winning pedigree, sprinkled with the talent and excitement generated by youngsters such as Jose Reyes and David Wright (second in the National League in batting average) bodes well for the Mets. Remember, however, that early season excitement is just that: early season excitement. The season is merely in its infancy, with myriad possibilities waiting to transpire.

Speaking of possibilities and opportunities, let's focus on my deep in-the-money call pick for this week:

Abbott Laboratories

(ABT) - Get Report

.

The stock closed last week at $41.50. We want to buy the August $35 calls for $6.90, using a limit order. Meaning: We will pay a minuscule 40 cents in premium when we consider the price of the common stock as of Friday's close, $41.50. Don't forget, the "premium" is one of the key factors in deciding what strike price we choose and how far out (in time) we decide to go. What is our goal? We are always trying to keep the price we pay in premium under $1.00.

There are some "volatile" stocks worth making exceptions for, like one of our past winners,

Nabors

(NBR) - Get Report

(we all

remember our good friendly Nabors, don't we?). With Abbott, we are going to control 1,000 shares of stock, again, that would cost us $41,500 if we bought 1,000 shares outright. With my low-risk/high-reward in-the-money calls strategy, it costs us only $6,900, or $400 (in premium) to control a powerhouse like Abbott for about four months. (For more on premium and a list of options definitions, please check out the

glossary for

TheStreet.com's

Options Alerts newsletter.)

Abbott will be announcing earnings on Wednesday before the market opens. I believe this underappreciated health care giant will post a solid number. Abbott Laboratories comes to the table with a forward P/E of 14.72, its return on equity comes in at a very respectable 23.47%, and it has over $4 billion in free cash flow. This diversified health care company, more than 100 years old, did a record $22.30 billion in revenue for the year 2005. This was up over 13.5% from $19.7 billion in 2004.

Headquartered in Chicago, Abbott touches people all over the world, with over 60,000 employees serving customers in about 130 countries. Abbott Laboratories is a well-known company, but we don't hear too much about it, and that, these days, is a good thing! It just keeps on producing, month after month, year after year. That is why I recommend taking a look at buying this in-the-money call.

Update time: For those of you who bought the

FPL Group

(FPL) - Get Report

September $35.00 calls for $5.80, I recommend you take a look at adding to your position right here, at $4.70. Remember, you have all the way until the third Friday in September. You are buying a quality company, as detailed

here. This is exactly what we are looking for, a quality company that is on sale. Lock and load!

Regarding

last week's pick,

Amgen

(AMGN) - Get Report

: I noted the July $60 calls, for $12.00. The in-the-money call is down about 80 cents, not much of a change. It will be announcing earnings Tuesday, so keep your eye on the ball. No need to make a move here unless the operators on Wall Street take it down a point or two before earnings, then you could think about buying more. If they run it up? Perhaps take profits!

Remember:

Life is a journey, enjoy the ride!

At the time of publication, Dykstra was long FPL and Amgen calls, although holdings can change at any time.

Nicknamed "Nails" for his tough style of play during his Major League Baseball career, Lenny Dykstra was an integral member of the powerful Mets of the mid-1980s, including the world champion 1986 squad, and the Phillies in the early 1990s.

Today, Dykstra manages his own stock portfolio and serves as president of several of his privately held companies, including car washes; a partnership with Castrol in "Team Dykstra" Quick Lube Centers; a state-of-the-art ConocoPhillips fueling facility; a real estate development company; and a new venture to develop several "I Sold It on eBay" stores throughout high-demographic areas of Southern California.