Hansen Natural (HANS) 11/10/09 PriceWatch Alert Bearish Price Movement

Posted: Tuesday, November 10, 2009 8:02 AM EDT
By: Market Intelligence Center Staff

Hansen Natural (NasdaqNM: HANS) closed yesterday at $34.39. So far the stock has hit a 52-week low of $23.00 and 52-week high of $44.02. Hansen Natural stock has been showing support around 33.52 and resistance in the 35.26 range. Technical indicators for the stock are Bearish. HANS appears on the Investors Observer Stocks In The News list. HANS reported earnings Thursday night, posting a third-quarter profit of $56.5 million, or 60 cents per share, on revenue of $307.9 million, missing analysts' forecasts of 63 cents per share on revenue of $309.19 million. For a hedged play on this stock, look at a Mar '10 34 covered call (QHO CQ) for a net debit in the $30.89 area. That is also the break even stock price for this trade. This covered call has a 130 day duration, provides 10.18% downside protection and a 10.07% assigned return rate for a 28.27% 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 HANS Jan '11 20 Call (XVO AD) and selling the Mar '10 34 call (QHO CQ) for a $12.60 debit. The trade has a 130 day life and would provide 5.21% downside protection and an 11.11% assigned return rate for a 31.00% annualized return rate (for comparison purposes only). Hansen Natural does not pay dividends at this time. [ATU-Seven Summits Research]