Watsco (WSO) 11/24/09 PriceWatch Alert Targets 5.56% Downside Protection

Posted: Tuesday, November 24, 2009 8:44 AM EDT

Watsco (NYSE: WSO) closed yesterday at $51.30. So far the stock has hit a 52-week low of $30.89 and 52-week high of $57.63. Watsco stock has been showing support around 50.07 and resistance in the 53.17 range. Technical indicators for the stock are Bearish and S&P gives WSO a neutral 3 STAR (out of 5) hold rating. WSO appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Jan '10 50 covered call (WSO AJ) for a net debit in the $48.45 area. That is also the break even stock price for this trade. This covered call has a 53 day duration, provides 5.56% downside protection and a 3.20% assigned return rate for a 22.03% annualized return rate (comparison purposes only). Watsco has a current annual dividend yield of 3.72%. [ATU-Seven Summits Research]

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