We are into earnings season with several of our Triple Play Income stocks due to report over the next couple of weeks. This will give us elevated premiums and opportunities to collect more cash ahead of those announcement dates. We will manage a few of those positions today trading ahead or after their reporting.
Cardinal Health (CAH): 76.25
Cardinal Health will announce earnings on 2/2 and analysts expect this to be one of the companies that will meet and beat projections. We will roll our calls out to the day after earnings (2/3) and keep our strikes at 79. If they blow out earnings, we get called out, keep our premium, and a 1.07 capital gains profit (we entered this position at 77.93).
ACTION: Roll the CAH 20 Jan 79 call to the 3 Feb 79 call for a net credit of around 0.85 to 0.90 and a 1.1% return
Buy to close CAH 20 Jan 79 call
Sell to open CAH 3 Feb 79 call
CF Industries (CF): 83.82
This volatile stock has struggled to match its 2022 trading levels but there is still enough implied volatility in the options to collect a reasonable premium. CF did recently receive several analyst upgrades for 2023 which could help the stock price rebound back to the 100 range. Earnings are not a factor yet.
ACTION: Roll the CF 20 Jan 90 call to the 3 Feb 89 call for a net credit of around 0.85 to 0.90 and a 1% return
Buy to close CF 20 Jan 90 call
Sell to open CF 3 Feb 89 call
Camping World Holdings (CWH): 23.56
Camping World is the king of RVs … which can be cyclical in nature. However, the company continues to expand their business model through internal growth and acquisition beyond RV sales … RV service, maintenance, and renovation … Good Sam Products & Services … Campground Network … and RV & Outdoor Products.
CWH’s earnings come out later in February so we will see then the impact of the company’s product and service diversification plan. For now, we will continue to sell calls on our current position.
ACTION: Roll the CWH 20 Jan 26.50 call to the 10 Feb 26 call for a net credit of around 0.30 to 0.32 and a 1.2% return
Buy to close CWH 20 Jan 26.50 call
Sell to open CHW 10 Feb 26 call
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