By Don Fanstone, Member, Kitchener/Waterloo User Group

AC June 7 2015Option Blog June 7, 2015:

VectorVest advises buying undervalued High VST stocks in a rising market.

VectorVest will help you make money if you follow VectorVest timing guidance.

USA: Color Guard Bearish, MTI .95, Dn/Dn, C/Down,      Do Not Purchase

CAN: Color Guard Bearish: MTI .83 Dn/Dn, C/Down         Do Not Purchase

With both markets falling, a good time to stand aside, cut losses or take profits.

Sells for the Week of June 1st:

Skyworks SWKS 5 Nov 90 Call Options @ $24     Profit $2,000 US

Buys for the Week of June 1st:

10 Air Canada (AC) Oct. 11 Call Options @$3.55

Air Canada is generating substantial income.

They have just opted out of a Government Pension Arrangement on May 27th.

Announced Buy-Back of 10 Million Shares, (3.4% of the float over the next year)

If you have flown on AC lately, you have contributed to earnings by:

  • Paying for your seat selection ahead of boarding time.
  • Having been charged baggage fees.

Noticed that their Load Factor is running at 84% or so.

Most investment firms have a price target of $17 to $20 on the stock.

Stock is selling at 4.2 x 2015 Earnings and 3.6 x 2016 Earnings.

Airline stocks have not been kind to investors in the past and many are loathe to place their bets on Air Canada. Yours to consider.AC June 7 2015

Stan Heller, our Canadian VV Rep would appreciate your input by writing articles for the blog. If you’re ready to share your trading experiences, contact Stan at [email protected]

Understand Options Before you begin to trade, there is much to learn.

DISCLAIMER: Options trading involves risk and is not suitable for everyone. The information contained in this Blog is for education and information purposes only. Example trades should not be considered as recommendations. Options training is strongly recommended before placing any trades. VectorVest offers a basic options course online and occasional intermediate options workshops in Canada each year.