Unum Group (UNM) PriceWatch Alert Targets 19.98% Return

Posted: Wednesday, June 24, 2009 8:07 AM EDT

Unum Group (NYSE: UNM) closed yesterday at $15.39. So far the stock has hit a 52-week low of $7.61 and 52-week high of $27.50. Unum Group stock has been showing support around 14.84 and resistance in the 15.72 range. Technical indicators for the stock are Bearish and S&P gives UNM a neutral 3 STAR (out of 5) hold rating. UNM appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Dec '09 12.50 covered call (UNM LV) for a net debit in the $11.39 area. That is also the break even stock price for this trade. This covered call has a 178 day duration, provides 25.99% downside protection and a 9.75% assigned return rate for a 19.98% 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 UNM Jan '10 10 Call (YVM AB) and selling the Dec '09 12.50 call (UNM LV) for a $2.10 debit. The trade has a 178 day life and would provide 21.38% downside protection and a 19.05% assigned return rate for a 39.00% annualized return rate (for comparison purposes only). Unum Group has a current annual dividend yield of 1.86%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]

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