Today is Wednesday, which means it is once again time for me to let it all hang out. As I promised when I began writing daily, I will share the real score with you in my Stat Book, every week, good or bad. As you'll see below, this was another solid week for my deep-in-the-money (DITM) calls strategy.
reported blowout earnings on Thursday, I scored a $1,700 win on those 10 contracts. The DITM strategy I implement requires placing a good-till-canceled sell order upon purchasing the options for $1 above my purchase price. Although that sell order is set to deliver $1,000 gains with the DITM calls, when the market gives more than that we will gladly take it.
After implementing a dollar-cost averaging strategy with the
last Tuesday, that position closed Thursday for a $2,000 win. This shows the power of dollar-cost averaging, as it lowered the average purchase price and sell price for GE and doubled the profit.
Now let's get to the next new pick. Though signs indicate that the broad bull market may slow down, that does not mean that smaller bull markets do not exist. One smaller bull market is the communications and networking sector, and it includes today's stock pick,
, which closed at $19.57 Tuesday.
BigBand services enable cable operators and telephone companies to offer video, voice and data services across a variety of networks. Its clients include
Time Warner Cable
Baseball fans may have seen Troy Tulowitzki turn an unassisted triple play the other day, just the 13th since 1909. My old teammate Micky Morandini accomplished the same feat in 1992, and in baseball, as in business, it's incredibly rare to turn a triple play without help.
Investors and consumers alike keep hearing about and seeing the benefits of the so-called "triple play" in communications, which offers customers cable, phone and Internet through one service. BigBand plays a key role in enabling companies to offer triple-play services and boasts six of the 10 largest service providers as its clients.
After a 31% increase on its IPO in mid-March, the stock has stayed within a fairly tight trading range, reaching a high of $20.47 at the end of April, after Cowen & Co. initiated coverage of BigBand with an outperform rating and Jefferies & Co. initiated coverage with a buy.
In its research note, Cowen said it expects a 20% increase in BigBand's share price over the next 12 months from strength in its triple-play services.
The company reports earnings on Thursday, and considering the growth and success of triple-play services over the past year, look for BigBand's shares to follow suit. In order to get in the lineup, I am going to capitalize on BigBand's growth. I will place a limit order to buy 10 contracts of the September 15s (QBEIC) at $5.50 or better.
Now let's take a look at the Stat Book.
At the time of publication, Dykstra was long CMCSA.
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.