Today, 6/18/12, I sold 1 Dec12 $15.00 Covered Call for a net deposit of $16.24 in an IRA account. My basis for these SPLS shares is now $14.78. These transactions represent a simple return of about 1.08% and an annualized return of about 2.12% on my basis.
As I wrote back in May, I have never owned SPLS and rarely own any retailer. I was reading an article (see the article here) this morning on SPLS, checked the stock price, dividend, option premium and decided that it was worth a shot. It helped that this purchase fit with the cash I had available in this account at the time.
S&P has a 12-month price target of $18 and a Buy recommendation for SPLS. MarketEdge has an Avoid rating and a price opinion to $14.92. The 16 Yahoo! Finance analysts have a 1-year price target of $16.39 and a recommendation of 2.4 where 1.0 is a Strong Buy and 5.0 is a Strong Sell. The price targets are down across the board as compared to the targets in May.
I do not know that I will be considering SPLS to be a part of my core. It does pay a reasonable dividend at 11 cents per quarter or about 3.45% on its current price. Of course, my yield will be less because my basis is higher than the current $12.74. SPLS increased its dividend to the current 11 cents in March from a previous 10 cents. An increasing dividend is always a good sign.