I originally sold a TGH put back on 09/14/12. This was mentioned in a post here.
I do like the company and it has been on a tear, up over 30% since earlier in the year.
I sold a 02/16/13$30 Put @ 2.10 that expired worthless over the weekend. I kept the entire premium of $210 minus brokerage fees.
TGH is currently over $42/share. I could have sold up to a $40 put and it would have expired worthless. A $40 put probably would have gotten me over $800 in premiums. Who would have known?
I plan to watch the stock and add more or sell another put on any weakness.
My total profit from options premiums is now $733 for the year. So far my options premiums are well ahead of my dividend income. I expect this to change in March since I have no more options expiring soon and March is a huge month for dividends.
I now have 15 open options and have updated my options page accordingly.
Wow, over $700 in option premium that has officially been collected. That's great and we've only just started in 2013. I really like selling put options as a way to set my limit orders. We'd all be millionaires if we could see the future, but it still worked out great for you.
ReplyDeleteThanks PIP. That's true, hindsight is always 20/20. I can't complain though, the options strategy is still working well for me.
DeleteCheers
AAI,
ReplyDeleteKiller option income man. You're doing fantastic!
I've looked at TGH a few times.
Some things that bug me are the slightly stressed balance sheet and the consistently negative FCF. This is one of the only companies that I've looked at that isn't a utility that has such a track record of poor FCF. Any thoughts on this?
The dividend growth is impressive, but I'm also unsure what kind of economic moat this company has? I certainly don't require every company I invest in to have a wide moat, but if a company doesn't have one I prefer to be very conservative on other metrics. This is maybe a speculative play?
Best wishes!
Thanks DM!
DeleteTGH does have a lot of debt but is the largest in the space and has the best fundamentals. TGH's biggest competitors are TAL, CAP & BOX. When the three are combined they have just a little more in market cap than TGH. Debt/Equity for TAL - 4.3; TGH - 2.24; CAP - 2.76; BOX - 5.21. The companies are highly leveraged. TGH has grown so rapidly that they have huge CAPEX numbers, this is primarily used to buy more containers. Fleet utilization has been over 95% since 2010. I'm not too worried about the debt loads since they are using it to grow.
They are the largest competitor in the space and can buy these containers in bulk giving them the best margins. They also have the most shipping terminals so they can charge a premium for their service. I believe this gives them a small moat.
Originally it was more of a speculative play but the more I learn about the company the more I want to add more to my position.
Thanks for dropping by!