Triquint Semiconductor (TQNT) is a pure play on the booming wireless network, smartphone and tablet markets. This midcap company provides radio frequency (RF) solutions and technology.
Some of their products include filtering, switching and amplification devices for transmitting data across mobile phones and Bluetooth, but applications for some of TQNT’s electronic components extend to network infrastructure and the aerospace and defense fields.
In the second quarter, TQNT blew past estimates by 36% and forecast its revenue growth rate to double in 2014. The stock jumped 14% on the earnings news and is set to jump again when the Q3 numbers are released in late October. My view is that shares of TQNT can surpass $9 by the November options expiration. For those of you who follow my buddy Sam Collins, I’d note that TQNT is also currently a technical favorite of his.
Recommendation: For every 100 shares of TQNT that you own or purchase at market (currently at $8.16), sell one TQNT Nov. $9 call at 22 cents.
By selling covered calls, you have the obligation to deliver 100 shares of TQNT at $9 to the buyer at expiration, should they exercise the call. If this happens, your potential gain is 13%. In either case, you keep the initial $22 from your sale.
Now is the perfect time to join Bryan Perry’s breakthrough income investing service, Cash Machine Trader, and discover how selling covered-call options can help you manufacture ‘top-up dividends’ of up to 30% per year.