Today, 8/27/10, I sold 8 S Jan11 5 Covered Calls for a net deposit of $183.89 in an IRA account.  My basis for these S shares is now 9.98. .

I wrote the following in earlier posts:

S&P has a 12 month price target of $5 for Sprint.  Jim Cramer recently featured Sprint on his show Mad Money.  He has a thesis that Sprint stands a very good chance of benefitting from an upcoming iPhone release that should allow Sprint to provide service for them.  At least that is what I understood him to say.  Jim expects Sprint to report better cash flow and that will cause analysts to upgrade it which in turn will cause it to rise.  He suspected a move to over 5, possibly to 6 in the next few months.  You can see some of his comments at the following link.  If the link does not work directly just cut and past it into your browser.

http://www.thestreet.com/video/10733498/mad-money-recap-sprint.html?puc=_yahooplayer&s=1#79531631001

Since then at least part of Jim’s thesis has come true.  S&P has already raised its 12 month price target to $6.  Sprint is apparently experiencing slower customer losses and appears to benefit from a planned 4G wireless rollout.  Even today, with the DOW down about 183 points as I write this, S is up .02.

Now, in August, S&P has a 12 month price target of $6.50 while MarketEdge has a price opinion of $4.45.  The stock closed down today at $4.00.  Most of the analysts that I can see have negative “sell” type ratings on Sprint.  So, I just decided to go ahead and sell these Covered Calls at $5 and wait and see what happens.  I may need to try rolling them out before Jan11 expiration.

S paid a small dividend (2.5 cents) up until December 2007.  It has not paid a dividend since then and I am not sure if or when they will resume.  Today I do not consider S part of my core holdings, mostly because it no longer pays a dividend, I am still content to hold it and collect option premiums to reduce my basis and one day expect to exit S at a profit.  I Sprint does resume dividends one day, and before I sell it, I will re-evaluate whether or not to continue holding it.  I doubt that I will repurchase it if I no longer hold it at that time.

Today, 8/27/10, I sold 1 FCX Nov10 85 Covered Call for a net deposit of $100.22 in an IRA account.  My basis for these FCX shares is now 85.48, excluding dividends received.  This transaction represents a simple return of about 1.16% and about 5.02% annualized on my basis.

S&P currently has a 12 month price target of $95 on FCX.  I feel pretty comfortable selling the November $85 strike.  If necessary I think I will be able to roll the Call up and out without too much difficulty.

I like FCX and would like to own more of it.  To that end I have also sold a Nov10 75 Put on FCX which I have written about in earlier posts.  That Put is currently underwater but my basis on it would be 66.82 if assigned to me.  Even so, I may end up rolling that Put out and possibly down as I did near the end of April.  I want to own more but as cheaply as possible. 

As I noted in an earlier post, FCX has doubled its dividend to .30 per quarter.  I am really pleased to see that as dividends are one of the major reasons for me to own any particular stock.  I fully expect that FCX will continue to raise its dividend over the next few years as the world economy continues to improve.

Today, 8/25/10, I sold 7 BAC Oct10 14 Covered Calls for a net deposit of $131.66 in an IRA account.  My basis for these BAC shares is now 20.34, excluding dividends received.

As of 6/19/10, S&P currently has a 12 month target of $22 for BAC, down from an earlier target of $26, with a 5 star (its highest) rating.  MarketEdge has a price opinion of 16.18 with an avoid rating.  The stock closed at $12.66 today.

I was a little hesitant about selling the 14 strike price but with BAC now in the 12’s and the market in general and financials in particular trending down or at best in a range, I decided to go ahead and sell the 14 strike.  If BAC moves up to the 14 level I will be able to roll these Calls out and probably up before they expire.

BAC currently pays a paltry .01 quarterly dividend.  It has paid a .64 quarterly dividend as recently as September 2008.  I believe that BAC will eventually raise its dividend again.  I don’t know if it will be back to the .64 level but certainly it should be well above what it is now.  I continue to believe that BAC will be a strong winner for me one day.