Researching a stock can take you down some interesting paths. When searching for information on today's pick, Motorola (MOT) , I was familiar with many of the company's achievements over the last 80 years, but I found a few new ones, too.
For example, I knew that Motorola marketed the first cell phones in the mid-1980s. Although cumbersome by today's standards, the Motorola DynaTAC was a miracle of technology at the time. But I didn't know how much Motorola put into pioneering cellular technology. It spent $100 million in development costs from 1973, when its first cellular prototype successfully made a phone call, to 1983, when the FCC finally gave it approval to pursue the technology for consumer use.
Every time you make a convenient cell-phone call, you can thank the visionaries at Motorola for the opportunity.
Motorola is also responsible for the first car radio, the first two-way car radio, and the first truly rectangular color TV tube. When Neil Armstrong said, "One small step for man; one giant leap for mankind," the radios and satellite relays that transmitted those words were manufactured by Motorola. They can also be credited with the world's first 32-bit microprocessor. These are just a few of its remarkable milestones.
Today Motorola is a $42.7 billion company, so one could say that its $100 million investment in the 1970s and 1980s was well spent. However, when I selected Motorola deep-in-the-money (DITM) calls on May 7, buying October 15s (MOTJC), I did so for several reasons: Razr sales were slumping because of overhyped iPhone from
, which is due to be released in just 10 days; Motorola's quarterly earnings were disappointing; and we had the possibility of Carl Icahn earning a seat on its board of directors. These factors just hammered the stock, presenting us with a great opportunity for implementing our DITM strategy.
Because the market exaggerates both the negatives and positives, even rock-solid companies like Motorola can suffer a mighty pummeling. To put this in perspective, let's look at the numbers in what was considered a disappointing quarter: sales were $9.4 billion, with a net loss from continuing operations of 9 cents per share, yet it reported handset shipments of 45.4 million units; a 20% increase in networks and enterprise sales, including record first-quarter sales to public safety customers; a 42% increase in Connected Home Solutions sales, including record quarterly shipments of digital entertainment devices; and at quarter-end -- this one is important -- the company reported aggregate purchases of $3.1 billion of common stock under the current $7.5 billion share repurchase program.
Motorola is trading near both its 50- and 200-day simple moving averages, and very close to its 52-week low. These are indicators that point to prime picks for the deep-in-the-money strategy. I plan to take advantage of the sale prices and buy 10 more contracts of the October 15s for $3.50, or better.
And now, let's talk life and sports.
In 1972, President Nixon signed a law that declared Father's Day the third Sunday of June. Since then, the holiday has been celebrated annually across the nation.
There are almost 100 million cards sold for about 66.3 million fathers, making Father's Day the fourth-largest card-sending day in the U.S. Children send about 50 million cards to their fathers every year, wives are responsible for sending about 20 million cards to their husbands, and the remaining 30 million cards are for grandfathers, sons, brothers, uncles or any loving father figure.
How about another necktie to add to the collection, or perhaps another golf club to drop in the bag? Odds are, dad will wear the new necktie and use the new club, or perhaps the new polo will remain hung in his closet. Nonetheless, while the gifts are certainly plentiful, it's all about the family gatherings on the back patio with the alluring scent of burned ash and seasoned hamburgers.
Kaine Gilman's Father's Day gift was a much different type of delivery. No UPS, or FedEx, or tearing apart gift-wrap. Rather, Gilman delivered his own gift -- his daughter. After his wife's water broke, they began calling relatives, and soon after realized this delivery would not wait!
Following his daughter's prompt arrival in his hands, Gilman got his daughter's name tattooed onto his shoulder with the date of her birth: Father's Day. He described her first cry as "the most beautiful sound ever." While this gift accounts for less than a fraction of a percentage in the Father's Day market, it certainly measures up in value.
Whether you plan on wearing your new shirt, or new tie, or new hat, appreciate the words on the card, and more importantly, the thoughtfulness and love of the person giving you the gift. Hang up the picture from your preschooler of the necktie-shaped construction paper that opens up to read "Happy Father's Day Daddy" with an upside-down letter here and there.
The Players Club recognizes and grasps the importance of fatherhood and family. We strive to give professional athletes the gift of guaranteed recurring cash flow through our strategic partner, providing the present of financial security. However, beyond the gift-wrap and ribbon, the ultimate gift lies in the love of those around us.
Always remember: Life is a journey, enjoy the ride!
At the time of publication, Dykstra was long MOT.
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.