Ryder System (R) PriceWatch Alert Up To 26.14% Return

Posted: Monday, July 06, 2009 8:07 AM EDT

Ryder System (NYSE: R) closed yesterday at $26.45. So far the stock has hit a 52-week low of $19.00 and 52-week high of $75.09. Ryder System stock has been showing support around 25.20 and resistance in the 28.56 range. Technical indicators for the stock are Bearish and S&P gives R a neutral 3 STAR (out of 5) hold rating. R appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Jan '10 25 covered call (R AE) for a net debit in the $21.95 area. That is also the break even stock price for this trade. This covered call has a 194 day duration, provides 17.01% downside protection and a 13.90% assigned return rate for a 26.14% 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 R Jan '11 15 Call (VRV AC) and selling the Jan '10 25 call (R AE) for an $8.05 debit. The trade has a 194 day life and would provide 12.85% downside protection and a 24.22% assigned return rate for a 46.00% annualized return rate (for comparison purposes only). Ryder System has a current annual dividend yield of 3.22%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]

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