Today, 3/12/12, I BTC 5 PDS Sep11 $8 Covered Calls and STO 5 PDS Sep12 $8 Covered Calls for a net deposit of $69.36 of option premiums in an IRA account.  My basis for these PDS shares is now $18.55, excluding dividends received.  This transaction represents a simple return of about .74% and an annualized return of about 1.40% on my prior basis.

PDS last paid a dividend in Feb09.  It was .03 per share down from the previous .13 per share.  It was the dividend that first attracted me to PDS because it was a monthly dividend.  PDS is based inCanada.  I don’t expect that PDS will be paying monthly dividends again when and if it resumes paying them.  PDS is a Canadian Trust and the tax law changes inCanadahave caused many trusts to change to standard corporations.

So, what do I do with PDS?  If it does not resume paying a dividend it will not fit my general investment goals.  On the other hand, you know how I hate to have a stock called away below my basis.  I expect that I will occasionally purchase an additional 100 shares to average down my basis and continue to sell Covered Calls on the shares until they are eventually called away.

S&P does not have a price target while MarketEdge has a price opinion of $11.77 and a Long recommendation that was last updated earlier this month.  The 14 reporting YHOO analysts have a 12-month price target of $16.07 and a rating of 2.1 on a scale where 1.0 is a Strong Buy and 5 is a Strong Sell.

Today, 8/23/11, I BTC 5 PDS Sep11 $8 Covered Calls and STO 5 PDS Mar12 $8 Covered Calls for a net deposit of $107.36 of option premiums in an IRA account.  My basis for these PDS shares is now $18.68, excluding dividends received.  This transaction represents about a 1.14% simple return and an annualized return of about 1.97% on my prior basis.

PDS last paid a dividend in Feb09.  It was .03 per share down from the previous .13 per share.  It was the dividend that first attracted me to PDS because it was a monthly dividend.  PDS is based in Canada.  I don’t expect that PDS will be paying monthly dividends again when and if it resumes paying them.  PDS is a Canadian Trust and the tax law changes in Canada have caused many trusts to change to standard corporations.

So, what do I do with PDS?  If it does not resume paying a dividend it will not fit my general investment goals.  On the other hand, you know how I hate to have a stock called away below my basis.

I do see some positive news for PDS and the current higher price of oil seems to have also been beneficial.  I don’t know if the higher oil will continue but the stock price had been on a steady climb since Sep10 until late July and it has been recovering since then.  So, I don’t think the stock price increase can only be the result of the higher oil price.

S&P does not have a proposed a price target and MarketEdge has a price opinion of $11.74 that was last updated earlier this month.  The YHOO analysts have a 12 month price target of 18.18 and a rating of 2 on the scale where 1.0 is a Strong Buy and 5 is a Strong Sell.

Today, 3/18/11, I BTC 4 PDS Mar11 7.50 Covered Calls, bought 100 PDS shares, and STO 5 PDS Sep11 8 Covered Calls for a net deposit of $133.10 of option premiums in an IRA account.  My basis for these PDS shares is now 21.17, excluding dividends received.  This transaction represents about a 1.26% simple return and an annualized return of about 2.51% on my averaged down basis.

A funny thing happened on the way to March expiration.  I had an error in my spreadsheet and thought that my PDS strike price was $10 when it was actually $7.50.  PDS is trading over $12 and I don’t really want to be called away just yet.  So, I do my calculations trying to set up a scenario that would help me out with my problem using a BTC price for the $10 strike.  I got a wake up call when I tried to BTC my $10 Calls…I didn’t have any.  It turns out not to be a big problem except that I see I am underwater more than I had thought.

PDS last paid a dividend in Feb09.  It was .03 per share down from the previous .13 per share.  It was the dividend that first attracted me to PDS because it was a monthly dividend.  PDS is based in Canada.  I don’t expect that PDS will be paying monthly dividends again when and if it resumes paying them.  PDS is a Canadian Trust and the tax law changes in Canada are causing many trusts to change to standard corporations.

So, what do I do with PDS?  If it does not resume paying a dividend it will not fit my general investment goals.  On the other hand, you know how I hate to have a stock called away below my basis.

I do see some positive news for PDS and the current higher price of oil seems to have also been beneficial.  I don’t know if the higher oil will continue but the stock price has been on a steady since Sep10, with the exception of a couple of weeks ago and it has recovered since then.  So, I don’t think the stock price increase can only be the result of the higher oil price.

S&P does not have a proposed a price target and MarketEdge has a price opinion of $7.76 that was last updated in Oct. 2010.  The YHOO analysts have a 12 month price target of 10.67 and a rating of 2 on the scale where 1.0 is a Strong Buy and 5 is a Strong Sell.

After all that I decided to buy the additional 100 shares to average down my basis and roll up the strike price to $8 which was just enough to give me a positive cash flow on the two option transactions.  The option premium on the new shares would reduce my basis on them alone down to about $8 so this is not quite as bad as it first appears and it gives me the chance to play with PDS again in September.