Market Shadows’ Virtual Value Portfolio has been active this morning.
Today’s weak opening gave us the chance to put some capital back to work. We picked up 130 shares of good-yielding food service provider Sysco (SYY) @ $35.09, and 300 shares of slot machine manufacturer International Game Technology (IGT) @ $14.65.
At our entry prices, SYY and IGT offer current yields of 3.31% and 2.73% respectively. The purchases amounts $4,561.70 (for SYY) and $4,395.00 (for IGT) will be deducted from our cash reserve.
Market Shadows Put Writing Portfolio also used IGT as an underlying stock. We sold 4 contracts of IGT’s Jan. 15, 2106, $13 puts for $2.55 per share. Our ‘if exercised’ price is a low $10.45 per share ($13 strike – $2.55 put premium). (I.e., if the shares get “put” to us, we end up buying them for a net $10.45 per share.)
IGT has not spent one day as low as our break-even/”if put” point since the dark days of early 2009. Buyers near IGT’s March 2009 nadir tripled their money within six months.
Each previous sharp sell-off in IGT has been followed by a relatively quick rebound. Resistance comes into play in the $18 – $20 zone.
The two new purchases will now be tracked in the Virtual Value Portfolio.
The newly shorted IGT puts as well as all our previously completed and open option positions are detailed in the Virtual Put Selling Portfolio.
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