2009:
Market Capitalization $8.2B
Revenue (FYR) $5.5B
Total Debt $3.15B
EPS $3.81
P/E Ratio 15.5x
Shares Outstanding 139.3 M
Avg. Daily Share Volume (Last 10 Days) 1.8 M
Dividend: $2.00
Clorox Co is a profitable Personal & Household Prods.
company that trades on the NYSE. I am sure you will
recognize the products from this company - Brita, Armor All,
STP, Glad, Burt's Bees, Hidden Valley, KC Masterpiece,
Kingsford charcoal, Green Works, and of course Clorox Bleach,
among many others.
The Company sells its products primarily
through mass merchandisers, grocery stores and other retail
outlets. It primarily sells these products in North America,
while having a smaller presence outside our continent. It is
working to grow its brands beyond our borders and has
increased its revenue and its dividend each year. This is a
large consumer products corporation with an attractive
dividend.
Over the next few years
Clorox believes it will grow its revenue between 3 to 5
percent annually. This could be higher if its brands become
more common place outside North America. Presently they have
10 number one brands out of the top 16 consumer brands.
Clorox is very strong when it comes to its brand names and
that could be the key to my success as well.
The biggest
problem Clorox faces is that many of its brands are related
to the commodities which they are derived from. This has
meant an increase in actual cost to produce by about 600
million dollars annually. The company believes this cost
will decrease by about 100 million annually starting in 2010
going forward. They have managed to increase the cost of
their products aside from Glad, by close to 50% and the
consumer has not balked at these price increases. This bodes
well for Clorox brands.
Their profit margin is around 9.85%
which is reasonable for a consumer products company. Their
debt is 3.15 billion and declining gradually. Return on
assets is again good at 13.96% but book value is poor at
$2.00 per share outstanding. The chart below shows that the
price for the stock however remains range bound, which is
okay for my strategy as I want low volatility in the stock
in order to have some degree of comfort for both my puts and
calls.
CLOROX (CLX)
- 2009
Clorox Stock Symbol - CLX
ONGOING EVALUATION
& TRADE
Year 1
Strategy: Selling Naked Puts Until Assigned
This will
be a core holding. Options are thinly traded and premiums
are reasonable but not terrific. However my strategy with
this stock is selling naked puts at the money and in the
money to follow the stock movements. The stock has an
excellent trading range and is widely held by institutions.
The current strategy is selling naked puts until I either
accept assignment OR get assigned shares. Then I will turn
to covered calls and collect the dividend. Should the stock
fall too low making covered call selling impractical I
will add to my stock position through selling naked puts to
lower my overall cost.
I set up a Yahoo forum for those interested in discussing selling stock
options for income including covered
calls, selling naked puts, spreads and other option and stock strategies.
JOIN HERE
YEAR 1: 2009 - Trade Commenced March 2009 Goal for 2009:
10% (10 months)
Strategy: Sell Naked Puts Until Assigned
Capital In Use At End Of 2009
32,500.00
Income Earned in 2009 (10 months)
5740.00
Return On Capital in 2009 (10 months)
17.66%
Should you find my strategy and ongoing evaluation of
this trade of value I hope you will consider a tip
for the time I spend detailing out this trade.
I have set up a Paypal account for those
who would like to donate. Thank you in advance. Remember, nothing on my site is financial advice.
They are just my ideas and opinions. Investing is risky and losses can be large. Trade
at your own risk.
Read the
terms of use
TRADE COMMENCED March 23 2009
ONGOING STRATEGY
- SELLING NAKED PUTS UNTIL ASSIGNED
Mar 23 09
49.91
STO 5 Naked Puts Apr 50 @ 1.15
2.3
13.25
561.75
561.75
March 23 2009 - Here is a three year chart on Clorox. The
trading pattern is quite evident. Even in the credit crisis
the stock only fell to a low of $45.71.
Apr 3 09
53.10
STO 1 Naked Puts Apr 55 @ 2.15 (Trying to
pick up 100 shares at $55.00)
