On Monday, 1/23/12, I sold 8S Jan13$4 Covered Calls for a net deposit of $73.92 in an IRA account.  My basis for these S shares is now 9.48.  This transaction represents a simple return of about .97% and an annualized return of about .97%, if held to expiration.

Sprint has fallen off a cliff since August 2011 and continues to drift downward.  It is up a little today at 2.20 but I have no great expectation for it.

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,  but 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.  If 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.

The 20 Yahoo Analysts currently have a 12-month price target of $3.78 and a 2.7 recommendation where 1.0 is a Strong Buy and 5.0 is a Strong Sale.  So, I guess the consensus is slightly toward a sell.

Today 1/19/12, I BTC 3 S Jan12 $3 Puts and STO 3 Aug12 $3 Puts for a net deposit of $38.45 in an IRA account.  My basis for these S shares if put to me would now be about $2.52 plus trading costs.  These transactions yield a simple return on my potential assigned price of about 5.07% and an annualized return of about 8.74%, if held to expiration.

I already own 800 shares of Sprint with Jan12 Covered Calls at the $5 strike price on them.  My basis for the existing shares is $9.57.  At the time I sold the Jan12 Puts I expected that they would expire worthless.  It turns out that I was wrong.    I also thought that an assignment would be beneficial because it would allow me to average down my total holdings to about $7.69.  Upon current evaluation, I see that I am dollars ahead by rolling out these Puts rather that selling Covered Calls on the assigned stock.  As it is, I will need to go out to Jan14 to sell the $5 Call or Jan13 to sell the $4 call for a reasonable premium.  I may need to sit on Sprint for a time to see if it will recover a bit before selling new Calls on my existing shares.

S&P currently has a 12-month price target of $5.00 for Sprint with a Buy recommendation but a poor (0% accuracy) rating predicting Sprint’s price movement.  MarketEdge has a price opinion of $2.77 with a Neutral recommendation and a Fair (40% accuracy) rating prediction Sprint’s price movement.  The 29 Yahoo Analysts have a mean 12-month target of $3.83 with a recommendation of 2.7 where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

As you may surmise from my comment above, I don’t really desire to continue owing Sprint but also don’t want to have it called away at a loss.  There are no dividends so, unless I can make a decent return from the option premiums, I expect it will be out of my portfolio one day.

Today 8/22/11, I sold 3 S Jan12 $3.00 Puts for a net deposit of $104.72 in an IRA account.  My basis for these S shares if put to me would be about 2.65 plus trading costs.  These transactions yield a simple return on my potential assigned price of about 13.16% and an annualized return of about 31.00%, if held to expiration.

As you may have just read in my previous post, I already own 800 shares of Sprint with Jan12 Covered Calls at the $5 strike price on them.  My basis for the existing shares is $9.57.  I don’t really expect the $3 Puts to be assigned to me but if they are the assignment will further reduce my average basis to about $7.69.  Perhaps I will be able to actually sell Covered Calls above my basis one day and get these shares called away.

S&P currently has a 12 month price target of $6.00 for Sprint with a Buy recommendation but a poor (0% accuracy) rating predicting Sprint’s price movement.  MarketEdge has a price opinion of $4.23 with an Avoid recommendation and a Fair (33% accuracy) rating prediction Sprint’s price movement.

As you may surmise from my comment above I don’t really desire to continue owing Sprint but also don’t want to have it called away at a loss.  There are no dividends so, unless I can make a decent return from the option premiums, I expect it will be out of my portfolio one day.