Arkansas Best (ABFS) PriceWatch Alert With Support Around $32.75

Posted on Thursday, July 24, 2008 8:07 AM

Arkansas Best (NasdaqNM: ABFS) closed yesterday at $35.94. So far the stock has hit a 52-week low of $17.94 and 52-week high of $45.13. Arkansas Best stock has been showing support around 32.75 and resistance in the 41.15 range. Technical indicators for the stock are Bearish and S&P gives ABFS a positive 4 STAR (out of 5) buy rating. ABFS appears on the Investors Observer Stocks In The News list. ABFS sunk $8.99 (-20.01%) Wednesday after announcing its second-quarter profit dropped 17.6% to $16.16 million, hurt by higher expenses for fuel and worker's compensation insurance. The company posted earnings of 64 cents per share on sales of $498.5 million, while analysts were expecting a profit of 75 cents per share on revenue of $481 million. For a hedged play on this stock, look at a Mar '09 35 covered call (FDQ CG) for a net debit in the $29.04 area. That is also the break even stock price for this trade. This covered call has a 240 day duration, provides 19.20% downside protection and a 20.52% assigned return rate for a 31.21% annualized return rate (comparison purposes only). Arkansas Best does not pay dividends at this time. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]