A New Stock Bought – New Puts Shorted

Market Shadows added 100 shares of Israeli-headquartered Teva Pharmaceutical Industries (TEVA)  to our Virtual Value  Portfolio.

We purchased at $39.96 per share with cash from our reserve fund.

We also sold 1 contract of the Jan. 2015 $42.50 strike price put @ $6.05 and 1 contract on the Jan. 2016 $45 put @ $9.50 per share. Those option  trades will be followed in our Virtual Put Writing Portfolio.

At $39.96 TEVA trades for just 8x 2013 estimates , excluding non-recurring charges, and yields 3.27% before foreign withholding tax.

The break-even prices on the 2015 & 2016 expiration date puts are $36.45 and $35.50 respectively. Those ‘if put’ levels are very close to the absolute low prices dating all the way back to 2008.

See full details on the equity portfolio by clicking here.

View all Market Shadows’ open and closed-out option positions by using this link Put Selling Portfolio Details.