Telefonos de Mexico (TMX) PriceWatch Alert Targets 11.75% Return

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

Telefonos de Mexico (NYSE: TMX) closed yesterday at $16.17. So far the stock has hit a 52-week low of $12.54 and 52-week high of $27.18. Telefonos de Mexico stock has been showing support around 15.66 and resistance in the 16.60 range. Technical indicators for the stock are Bullish and S&P gives TMX a neutral 3 STAR (out of 5) hold rating. TMX appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Feb '10 15 covered call (TMX BC) for a net debit in the $13.97 area. That is also the break even stock price for this trade. This covered call has a 229 day duration, provides 13.61% downside protection and a 7.37% assigned return rate for an 11.75% annualized return rate (comparison purposes only). Telefonos de Mexico has a current annual dividend yield of 4.12%. [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]

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