J B Hunt (JBHT) PriceWatch Alert for October 28, 2009

Posted: Wednesday, October 28, 2009 8:28 AM EDT
By: Market Intelligence Center Staff

J B Hunt (NasdaqNM: JBHT) closed yesterday at $31.64. So far the stock has hit a 52-week low of $18.14 and 52-week high of $34.78. J B Hunt stock has been showing support around 30.76 and resistance in the 33.00 range. Technical indicators for the stock are Bullish and S&P gives JBHT a positive 4 STAR (out of 5) buy rating. JBHT appears on the Investors Observer Hedged Dividend Income list. For a hedged play on this stock, look at a Jan '10 30 covered call (JHQ AF) for a net debit in the $28.64 area. That is also the break even stock price for this trade. This covered call has an 80 day duration, provides 9.48% downside protection and a 4.75% assigned return rate for a 21.67% 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 JBHT Jan '11 15 Call (ZOR AC) and selling the Jan '10 30 call (JHQ AF) for a $14.45 debit. The trade has an 80 day life and would provide 6.92% downside protection and a 3.81% assigned return rate for a 17.00% annualized return rate (for comparison purposes only). J B Hunt has a current annual dividend yield of 1.35%. [WBA-Seven Summits Research]