Collect Cash on this Turn Around Company (PM)

in #money5 years ago

Philip Morris (PM) is changing its image by changing its product line.

Philip Morris is a $133 billion company that makes and sells many leading cigarette brands – including Marlboro, Parliament, and Virginia Slims – outside of the United States.

Recently PM has been focusing its attention on vaping and e-cigarette's. While these products are not risk-free they are likely far better for smoker's health than traditional products. This business represents 5% of revenue today but the company plans on generating up to 30% of sales over the next 10 years.

Even with a negative image the company still generates huge profit margins of 27% paying a 5.3% dividend which is the highest dividend payment in 5 years. And shares are currently reasonably priced with shares trading at EV/EBITDA of 13.5.

The chart is showing the 200 day moving average (DMA) as being potential support.

image.png

Trade details:

Sell to open, the June 21, 2019, $85 puts on Philip Morris for $2.45 using limit order to earn 2.9% upfront payment for agreeing to buy shares at a slight discount.

At expiration if shares are above $85: put sellers will keep the $2.45 free and clear for a 29.2% annualized return.

At expiration if shares are below $85: put sellers will buy shares at a 3.3% discount to yesterday's closing price ($85 - 2.45 = $82.55 cost basis). For every 100 shares owned you can then sell covered calls for more income.

Use a stop loss at $74.50. This would be a 9.7% loss based on your cost basis. The stock would also be below its 200 DMA so it is best to protect capital and look for a new idea.

Take advantage of this world-class business and earn quick cash by selling puts on Philip Morris today.

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. The information provided should NOT be considered advice. The topics discussed are risky and have the potential to lose a substantial amount. I am not an investment professional and therefore do not offer individual financial advice. Please do your own research before investing.

Sort:  

To listen to the audio version of this article click on the play image.

Brought to you by @tts. If you find it useful please consider upvoting this reply.

Coin Marketplace

STEEM 0.36
TRX 0.12
JST 0.040
BTC 70744.80
ETH 3561.94
USDT 1.00
SBD 4.80