The market is ending this week higher and maybe showing some stability after the financial news this week. We had two more stocks report earnings yesterday in AbbVie and Vale S.A.
AbbVie (ABBV): 140.32
AbbVie turned in a solid earnings report with Q2 EPS of $3.37 beating estimates by over 11% and grew revenue by 4.5% to $14.58 billion. But the revenue number missed analyst estimates and the stock is down 6% this morning.
The good news from the earnings report is a number of AbbVie’s other drugs outside of the giant Humira are growing and should begin to fill in the gaps before Humira goes generic next year. Skyrizi was up 86% year over year as well as Rinvoq revenues grew 56% year over year to $592 million.
AbbVie remains a solid dividend play for 2022 and we will continue to sell calls going forward. Let the 29 Jul 157.50 call expire worthless and we will wait for the stock to rebound before selling our next call.
ACTION: No Action. Let the ABBV 29 Jul 157.50 call expire worthless.
Vale S.A. (VALE): 13.285
This mining company reported earnings with Q2 EPS of $1.32 beating estimates by $0.52 (that’s good) but a revenue miss of $11.16 billion miss of $450 million (that was bad). But the company approved $3 billion of dividend and interest to be paid in September (ex-dividend date not revealed yet) which will result in another 4% to 5% dividend payment bringing the annual dividend rate to over 10.5%.
The stock is basically flat today and has found support in the 13 to 14 range and gives us a chance to start selling covered calls again. Like Rio Tinto (RIO), Vale is one of our inflation hedge and commodity plays that can be very volatile to trade. We need to see firm support level in RIO before we trade this position but we can get back into Vale today with a covered call.
ACTION: Sell to open VALE 19 Aug 14.50 call for a credit of around 0.13 to 0.14 and a 1% return.
If we some continued stability in the markets early next week, we will be able to write calls on most of our other uncovered positions.
We will hold our Triple Play Income Quarterly Review Session next Wednesday (8/3) at 2:00 PM Eastern time. You can register to attend the Quarterly Review Session here.
We will send out email reminders ahead of next Wednesday.
Have a good weekend.
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