Buy Alert: May 16, 2014

| May 16, 2014 | 0 Comments

Buy Alert:  May 16, 2014

 

Trade Details

Buy Target (TGT) July $60 Calls for $1.05 or better

 

Why?

It’s been a rough year for Target. The stock’s down over 7% for the year while the S&P 500 is up about 2% overall for the same period. That’s a 9% variance – quite a lot for a low-beta stock.

Of course, the big blow to the company was the security breach where millions of credit cards were compromised. It also doesn’t help that Wal-Mart (WMT) just reported earnings and missed on the top and bottom lines.

Nevertheless, TGT is a good company and will recover. With a dividend yield around 3% and the previously mentioned low beta, income investors won’t let the stock drop much farther, if at all. The stock’s also sitting at strong support, while trading below the 200-day and 50-day moving averages.

Finally, we can buy July calls (over 2-months out until expiration) for a very reasonable price. Let’s grab the July 60 calls here.

 

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Category: OTW Buy Alerts