A stock that did well for my portfolio for quite a while last year was Seagate Technology. They trade under the symbol STX. Seagate goes head to head with Western Digital. (WDC). I prefer Seagate though as it trades at a lower Price to Earnings coming in at 11.2 times versus WDC at 20.18 times. Seagate also highest a gross profit margin almost equal to Western Digital at 27.56%, but it’s overall profit margin is 11.59% versus 6.86% for Western Digital. The return on investment is far higher with Seagate coming in at 25.87% versus just 9.88% for Western Digital. The dividend is also a lot higher at Seagate at $1.72 annual versus $1.20 for Western Digital. Cash flow is higher at Western Digital but Seagate is still decent at $6.93 per share versus $9.47 for Western Digital.
You can see then why I prefer selling put options against Seagate Stock.
Understanding Basics Of Put Selling A Declining Stock For Larger Premiums
But when it comes to understanding the basics of Put Selling as an investment strategy, you need to think about the stock charts as well and what they are telling you as an investor to benefit from aiming for the larger premiums a declining stock offers. This is a strategy article for FullyInformed Members combined with a full explanation as to why I increased the amount of capital I committed to this trade on Seagate Stock.
FullyInformed Members can can login directly through this link to read the rest this Put Selling against Seagate Stock strategy article or Members can sign in to the full members site here. Non-members can join here.