Tesoro (TSO) Gets 1 Star Strong Sell Rating From S&P

Posted: Tuesday, February 09, 2010 8:53 AM EDT
By: Market Intelligence Center Staff

Tesoro (NYSE: TSO) ended the last trading session at $12.00. So far the stock has hit a 52-week low of $10.62 and 52-week high of $19.16. Tesoro stock has been showing support around 11.53 and resistance in the 12.27 range. Technical indicators for the stock are Bearish and S&P gives TSO a very weak 1 STAR (out of 5) strong sell rating. TSO appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at an Aug '10 11 covered call for a net debit in the $10.05 area. That is also the break even stock price for this trade. This covered call has a 194 day duration, provides 16.25% downside protection and a 9.45% assigned return rate for a 17.78% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the TSO Jan '11 5 Call and selling the Aug '10 11 call for a $5.25 debit. The trade has a 194 day life and would provide 14.58% downside protection and a 14.29% assigned return rate for a 27.00% annualized return rate (for comparison purposes only). Tesoro has a current annual dividend yield of 1.63%. [ABR-Seven Summits Research]