Today, 6/18/12, I sold 2 F Aug12 $11 Covered Calls for a net deposit of $34.48 in an IRA accounts. My basis for these F shares is now $13.01. This transaction represents a simple return of about 1.31% and an annualized return of about 7.81% on my basis with 61 days to expiration.
Ford finally announced a dividend of five cents. Five cents equals the last dividend Ford paid back on July 31, 2006. As far as I can see, Ford had paid a ten-cent dividend from 2002 through April 28, 2006. So…I guess starting out at five cents is a reasonable place to start them up again. I have collected the five cents twice now, most recently on June 1st for a yield of 1.52% on my basis for these shares at that time.
The 12 Yahoo! Analysts have a 1-year mean price target of $15.75, down from $16.25 when I last wrote in December, with a recommendation of 2.1, where 1.0 is a Strong Buy and 5.0 is a Strong Sell. S&P has a 12-month price target of $14.00, down from $15.00 in December, and continues a Buy recommendation. MarketEdge has a price opinion of $10.35, down from a previous $11.03, and has a Neutral recommendation.
I am a little disappointed with the five-cent dividend and with Ford’s current stock price, which affects the option premium I collect. On the other hand, Ford is now paying a dividend and I am able to collect option premium. I will need to watch that Ford does not get too high on me now because I am a little underwater at my current strike price. Also, I was a little aggressive selling the $11 strike with F currently trading at $10.34. I guess that strike is a statement about my pessimistic opinion of F today. I may need to roll these Aug Calls out and hopefully up.