Trades for Torquio (also a good Watch List):
AFL - I always forget to buy AFL. Super-solid company that trades in a channel good enough for the Butterfly Portfolio and should do better as rates tick up (insurance companies have huge reserves they have to keep in "safe" accounts). They have $102Bn in long-term investments (bonds) that are paying them nothing - a 1% rise in rates drops $1Bn to their bottom line ($2.50/share). You only have to pay $70.67 for a stock that threw off $6.45/share last year (p/e 11) and though they project flat - flat is just fine when you are returning 9% a year. They pay a 2.5% ($1.72) dividend while you wait but not worth owning the stock as we can sell the 2019 $65 puts for $5.50 and buy the $60 ($13.50)/70 ($7.10) bull call spread for $6.40 for net 0.90 on the $10 spread that's 100% in the money.
ESRX - Another beaten-down Pharma that is worth owning. They made $2.5Bn last year, up from $2Bn the year before and they did $1.4Bn in the last two Qs so pacing towards $3Bn yet you can buy this company for $42Bn (trailing p/e 17) at $70. We can promise to buy them for $65 and get paid $8 to do it, which is net $57 which is 18.5% off the current price. In the LTP, I'm just going to do those but you can be aggressive and add the $60 ($17.50)/75 ($9) bull call spread for $8.50 and then it's net 0.50 for the $15 spread that's $10 in the money to start.
GILD - Still priced like they are going BK even though they made $18Bn last year and should make $13Bn this year but that's still cheap when the whole company is $91Bn (p/e 7).
