Looking back to 181 days ago, National Health Investors, Inc. (NHI) priced a 4,500,000 share secondary stock offering at $57 per share. Buyers in that offering made a considerable investment into the company, expecting that their investment would go up over the course of time and based on early trading on Wednesday, the stock is now 6.7% higher than the offering price. It should be noted that investors at the secondary have collected $1.50/share in dividends since the time of their purchase, so they are currently up 9.4% on their purchase from a total return basis.
Investors who did not participate in the offering but would be a buyer of NHI at a cheaper price, might benefit from considering selling puts among the alternative strategies at their disposal. One interesting put contract in particular, is the January 2015 put at the $55 strike, which has a bid at the time of this writing of $1.30. That would result in a cost basis of $53.70 per share before broker commissions in the scenario where the contract is exercised. If the contract is never exercised, the put seller would still keep the premium, which represents a 2.4% return against the $55.00 purchase commitment, or a 3.6% annualized rate of return (at Stock Options Channel we call this the YieldBoost). START SLIDESHOW:
Top YieldBoost Puts of of Stocks with Recent Secondaries »
