Dykstra: Calling Wachovia Again - TheStreet

Dykstra: Calling Wachovia Again

The January options again present a compelling trade.
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Today's pick, Wachovia Bank (WB) - Get Report, is a great reminder of why I have a basket of stocks that I know inside and out.

Wachovia has gotten cheap, and this morning it was upgraded to buy from hold at Citigroup. The report said, "Momentum in its core business remains strong and recent weakness in the share price has created a buying opportunity." The Citigroup report went on to say, "One potential reason for underperformance is credit, but we see Wachovia's credit quality as more likely to be a future positive catalyst for the stock as we see less of a credit headwind here than other banks."

Wachovia's strong risk-management division should help ensure that capital-markets exposure is less than its peers.

Once again, I'd like you to remember that with the deep-in-the-money (DITM) calls strategy, it is not always necessary to pick a new stock every day. When a stock comes back down to levels that have "buy" written all over them, it can be profitable to reinvest in that company again. I have successfully revisited several choices with this strategy, including


(AMGN) - Get Report


Johnson & Johnson

(JNJ) - Get Report



(WMT) - Get Report


I scored quickly with Wachovia just last week, but after that spike in price, the stock has tumbled below my original buy and is now presenting us with another solid DITM calls play. With Wachovia, all the right reasons to make this play are still true, with solid revenue and profit growth and a very strong dividend yield.

The company reported another strong quarter, due to the recent acquisition of Golden West Financial, delivering double-digit earnings growth. However, the financial sector has been taking a beating, so the stock is trading at $48.82.

Here is the pick: I will buy 10 January 40 calls (WBAH) at $9.60 or better, using a limit order. Stay disciplined, and let the stock come in. The market has created a situation whereby this could be a "winning play" if we stay disciplined.

Game of Life

We travel through life with the goal of leaving something behind. We like to leave our mark in places we have been, hoping we have created an impact with our latest experience.

While sometimes carrying a negative connotation, leaving a mark can signify something positive when a person has achieved incredible feats, which may be useful to a society, a family, or perhaps just an individual. We often hear the phrase "It's not the quantity, it's the quality." In this case, the expression holds true, for the magnitude of a single action is often much more noteworthy than the mere existence of many frivolous actions. This is not to say that quantity cannot be a form of quality, depending on the circumstances; yet, in my book, those who leave the mark are those who make the difference, regardless of the recipient.

For National Rugby player, Matt Austin, leaving a mark seems to have come unavoidably. On April 1, Austin was involved in a head-to-head collision with Ben Czislowski, another Rugby player, which left him bleeding and in need of stitches. A scar residing permanently on Czislowski's left eyelid will forever serve as a testament to the ferocity and aggressiveness of Matt Austin.

As if this was not enough, Czislowski recently developed an eye infection and complained of shooting pains in his head, accompanied by lethargy. After a visit to his doctor, an x-ray revealed that a tooth was imbedded beneath his scar where he had been punctured by Austin in the rugby match. Seems like Austin must have really sunk his teeth into that one!

Retrospectively it is easier to laugh at the situation now, but the truth stands that a tooth carries bacteria, which could have been extremely dangerous to Czislowski's health. Amazingly, there have been two other incidents in the National Rugby League whereby teeth have been imbedded in the flesh of another player.

Although none of these incidents involved any malicious intentions, we must be cautious so as to maintain an awareness of another's mortality as well as our own. In life, we often develop a sense of invincibility, which tends to be more evident at certain times. While this belief of supremacy has a propensity to fuel our successes at times, it can just as easily be the cause of our downfall. . Humility is crucial to succeeding in all aspects of life, especially within the realm of your own self-perception.

The Players Club understands the prevalence of the indestructible mindset of human beings, particularly professional athletes. Too often, professional athletes lose their hard-earned wealth and lifestyle for various reasons. Athletes are not expected to know how to manage their money, just as artists are not expected to know how to solve a quantum physics problem.

By guaranteeing recurring cash flow, through our strategic partner, as well as membership in an elite club, The Players Club seeks to embed certainty into the athlete's financial future. Hopefully, our knowledge and efforts will leave an indelible mark, which is undeniably worthwhile.

Always Remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra was long WB.

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."