Ford Will Have A Solid 2015

I have been saying for quite a while that I think that Ford Motor Company is an under appreciated, and certainly an undervalued stock. Nothing has changed my mind about that. The fact is that Ford Motor Company has quite a lot of good things going for it, and I believe this will help to drive the stock price towards the end of 2015 closer to the $20 valuation, where I think the valuation should be.

Among some of the key factors in my belief that Ford Motor Company should do well this year are:

• Quantitative easing in Europe which should help boost European sales and certainly help the European economy.
• Very attractive sales figures already for the new aluminum body Ford F-150.
• 24 new models released last year, which in the short term cost the company a lot, but that should boost bottom lines this year.
• A recent increase in the dividend bringing Ford's overall yield to a little over 4%, which is a sign that Ford is confident it will be profitable and can afford to continue to provide a piece of the pie to their shareholders.
• If gas prices can remain below $4 per gallon, this should also help to boost truck and SUV sales, which are the bread and butter for automakers. With the new F-150 out, I think there is no doubt that Ford will continue to maintain it's #1 position in truck sales, and may even attract a few GM and Dodge lovers over to their corner to check this out.
• Ford has been trading in a range of about $14.00 - $17.00 over the past two years. I think it can break the $17 resistance on strong sales, growth, and other factors, and once it does the stock will take off.

Overall, I think that 2015 will prove to be a very good year for Ford Motor Company investors. Even at today's prices hovering a bit over $15 per share I am a buyer. I will still be a buyer up to around $17 per share.

Disclosure: The author of this article is currently long Ford Motor Company (F) and intends to add shares within the next 30 days.

Watching Cypress Semiconductor (CY)

Back on the 21st I wrote that sometimes you simply root for sideways stock movement, and what I was referring to were stock options, and in this case Cypress Semiconductor (CY) in which I sold some covered call options for with a February 20th expiration date and a strike price of $15.

What was the plan?

Sell the calls and hope for the stock to stay below $15. Then there is always the problem with Murphy's Law, in which, if it happens to be of any interest whatsoever to you, I happen to have a very intimate relationship with.

If I short a stock it goes up. If I go long a stock it goes down. And when I sell a covered call on a stock that has been in a trading range and sell the call above the trading range that I do not wish to sell, but simply wish to generate cash on, it breaks through resistance and goes higher than the strike price.

Ugh!

Not that it bothers me ultimately. I still make money on the calls I sold and I still was already in the money on the underlying stock. Still, once a stock does go in the money I like to try and generate that cash monthly.

At least for a little while anyway.

So I am watching Cypress Semiconductor and keeping my fingers crossed that a) it will drop below the $15 strike, but not go too far below the strike, and b) that in the meantime the buyer of my calls does not decide to exercise his options forcing me to sell my stock.

It is trading today so far at $15.37, which also by the way happens to be a new 52-week high.




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Sometimes You Simply Root For Sideways Stock Movement

Options in the stock market are something I enjoy using from time to time simply to generate cash. I actually really like them. Especially when a stock is trading in a range that already has you showing a profit on paper, you can generate wads of cash doing it this way.

I always sell options contracts. I never buy them. Or at least I rarely do.

Cypress Semiconductor is one such stock that has been trading rather nicely in the past month or so, and so I decided it was time to generate some additional cash and sell some contracts on the underlying stock.

I made a pretty little penny, and I want to do it again next month as well on this one. I sold covered calls with a $15 strike price for February. It is trading today at around $14.15 and the expiration is of course about 30 days away.

So I am keeping my fingers crossed that the stock continues to rise a little bit of course, but also trades a bit sideways until the calls expire. The beauty of these things is that even if the stock is at $14.99 on the day of expiration, it is unlikely I will be called. I get to keep my shares, continue to earn dividends on them, and when I go to sell March contracts hopefully I'll be close enough to the mark to sell them at a $16 strike price.

Best of all worlds.

The key for me is simply to get as much out of any stock I own as I possibly can. That's the plan for Cypress Semiconductor. There's another currently on my radar, but I don't like the market price right now for it's calls.

In due time. I am patient, and the contracts I sold for Cypress should more than allow me some time to wait to pull the trigger on the other candidate.

Photo credit: Image is from Springboard Images.