Today, 1/12/11, I BTC 2 BRCD Jan11 5 Covered Calls.  I then purchased 200 BRCD shares at $5.88 and STO 4 Jul11 6 Covered Calls for a net deposit of $101.42 in my taxable account.  My basis for these BRCD shares is now 7.64.  This transaction represents a simple return of about 3.04% and an annualized return of about 5.60% on my basis if I accounted for everything correctly.

Thomson Reuters has increased its rating on BRCD to Neutral from Under Perform as recently as 1/19/11 while S&P has increased its 12 month price target to 5.50 from 5.00 and has a 3 star out of 5 rating (Hold) for BRCD.  Market Edge Second Opinion has increased it price opinion to 5.75 from 5.04 and but has downgraded it rating to Avoid from a neutral rating for BRCD.  Yahoo! Finance currently has a 6.43 12 month price target with a slight bias toward a Buy.

When I sole the Jan11 Covered Calls in September, I thought that I might need to roll BRCD out and had hoped that I might be able to roll it up at the same time.  As it turns out I would need to pay to roll the strike up so I decided to purchase the additional shares so I could reduce my basis and roll the strike up and out at a net credit on the option trades.  I invested additional cash to do that but this also gets me closer to being to have the stock called away above my basis one day.

I noted back in September that BRCD is in essentially the same business as 3PAR which was being bid up by HPQ and DELL.  There certainly exists the real possibility that somebody will come along and make a bid for BRCD which would leave my $6 strike price in the dust.  Tech in general seems to be in great favor right now.  There is a lot of talk about the need to do additional building out of the internet and local infrastructures which is the area that BRCD works.

BRCD does not pay a dividend and has been pretty much a laggard in my accounts.  I will be quite happy for it to be called away one day.

Today, 9/2/10 I BTC 2 BRCD Sep10 5 Covered Calls and STO 2 Jan11 5 Covered Calls for a net deposit of $32.95 in my taxable account.  My basis for these BRCD shares is now 9.82.  This transaction represents a simple return of 1.15% and an annualized return of 2.97% on my basis.

Thomson Reuters continues to rate BRCD as Under Perform as recently as 8/31/10 while S&P has reduced its 12 month price target to 5.00 from 5.50 and has a 3 star out of 5 rating for BRCD.  Market Edge Second Opinion has a price opinion of 5.04 and a neutral rating for BRCD.

When I sole the Sep10 Covered Calls in July, I thought that I might need to roll BRCD out and had hoped that I might be able to roll it up at the same time.  As it turns out I would need to pay to roll the strike up so decided to just roll it out.  The various analyst research reports are supportive of just rolling the Calls out.  On the other hand, BRCD is in essentially the same business as 3PAR which was recently bid up by HPQ and DELL.  There certainly exists the real possibility that somebody will come along and make a bid for BRCD which would leave my $5 strike price in the dust.  I suspect that it is this possibility that has caused BRCD to run up 70 cents or so in the past week.

BRCD does not pay a dividend and has been a real laggard in my accounts.  I will be quite happy for it to be called away one day.

Today, 7/29/10 I sold 2 BRCD Sep10 5 Covered Calls for a net deposit of $42.46 in my taxable account.  My basis for these BRCD shares is now 9.99.

Thomson Reuters rated BRCD as Under Perform on 7/27/10 while S&P has a 12 month price target of 5.50.  Market Edge Second Opinion has a price opinion of 5.04.

My last Calls on BRCD were sold in Oct09 for the Apr10 11’s.  I have been sitting on BRCD since the April expiration waiting for the opportunity to once again sell Covered Calls at the $11 strike or higher.  It appears that I could wait quite some time for that opportunity with my investment in BRCD being completely dead money in the meantime.  After doing a little research I decided to go ahead and sell the current Covered Calls with the belief that I could roll them out and perhaps up if BRCD decides to take a move upward past my $5 strike price.

This transaction represents a simple return of 2.08% and an annualized return of 15.1% on my basis which is a lot better than it just sitting there. 

BRCD does not pay a dividend and has been a real laggard in my accounts.  I will be quite happy for it to be called away one day.