Thursday, October 27, 2011

PFE - Adjustment

The following adjustment was made today on Pfizer Inc (PFE). All prices include IB commissions.

CriteriaValue
Dividend Champions StatusFallen Angel*
Previous Years of Consecutive Dividend Increases41**
Fair Value Estimate$27.00
Target Buy Price$20.00
Target Margin of Safety25.93%
Actual Buy Price$19.00
Actual Margin of Safety29.63%

*PFE is what I classify as a Fallen Angel (i.e. former Dividend Champion). PFE cut the dividend in 2009, but has since increased it in 2010 and 2011. **Prior to cutting the dividend PFE had 41 years of consecutive dividend increases.

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
10/27/2011PFEContinued TradeSTO 2 Nov11 19.00 Call @ 1.01  $202.31

Current Position Summary

Cost Basis($3,800.00)
Income Generated$411.25
Percent Income Generated10.82%
Annualized Income Generated22.07%
Net Profit If Assigned$411.25
Percent Return If Assigned10.82%
Annualized Return If Assigned22.07%
Days Held to Expiration179 days

Trade History

DateStockDescriptionTransactionStatusStock InvestmentIncome Generated
5/23/2011PFECSP Margin UsedCSP 200 PFE @ 19.00 ($3,800.00) 
5/23/2011PFEInitial Put OptionSTO 2 Aug11 19.00 Put @ 0.44Exercised $88.32
8/19/2011PFECSP Margin ReturnedCSP 200 PFE @ -19.00 $3,800.00 
8/19/2011PFEStock AssignedEX 2 Aug11 19.00 Put @ -19.00 ($3,800.00) 
8/29/2011PFEContinued TradeSTO 2 Sep11 19.00 Call @ 0.39Expired $78.31
9/20/2011PFEContinued TradeSTO 2 Oct11 19.00 Call @ 0.21Expired $42.31
10/27/2011PFEContinued TradeSTO 2 Nov11 19.00 Call @ 1.01  $202.31
11/18/2011PFE Totals ($3,800.00)$411.25
DTE179 Percent Income/Annualized 10.82%22.07%