Trade of the Day: Gentex (GNTX)

Advertisement

Gentex (GNTX), a company that makes auto-dimming rearview mirrors and windows, has been featured on Trade of the Day before, but it’s still attractive for new money.

The stock is trading in a constructive pattern and should trend higher this week with a tame market. I would expect this position to also work in our technical favor, with GNTX stock moving above $30 so that our shares are called away.

Recommendation: For every 100 GNTX shares that you own or purchase at market, sell one at-the-money GNTX Dec. $30 call contract at current levels. If you acted on my original recommendation earlier this month, you would have been filled around $0.65 and the calls are still offering attractive premium. I would expect  that based on current valuations, with GNTX trading just under $30 and the calls around $0.75, selling a call should yield about 3%.

Bryan Perry is the editor of Cash Machine, a newsletter focused on high-yield income investing with the goal of maintaining a blended total yield of 10% across two portfolios. Bryan is also the editor of Extreme Income,which uses the power of historically cheap money to create a leveraged “baby hedge fund” strategy that paves the way to massive profits and 4x greater income.

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.


Article printed from InvestorPlace Media, https://investorplace.com/2013/11/trade-day-gentex-gntx/.

©2024 InvestorPlace Media, LLC