Mobile Telesystems OJSC (MBT) 11/11/09 PriceWatch Alert Could Hit 37.71% Return

Posted: Wednesday, November 11, 2009 8:08 AM EDT
By: Market Intelligence Center Staff

Mobile Telesystems OJSC (NYSE: MBT) closed yesterday at $50.22. So far the stock has hit a 52-week low of $18.36 and 52-week high of $55.71. Mobile Telesystems OJSC stock has been showing support around 48.63 and resistance in the 52.03 range. Technical indicators for the stock are Bullish and S&P gives MBT a neutral 3 STAR (out of 5) hold rating. MBT appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Mar '10 50 covered call (MBT CJ) for a net debit in the $44.12 area. That is also the break even stock price for this trade. This covered call has a 129 day duration, provides 12.15% downside protection and a 13.33% assigned return rate for a 37.71% 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 MBT Jan '11 30 Call (OVD AF) and selling the Mar '10 50 call (MBT CJ) for a $16.35 debit. The trade has a 129 day life and would provide 7.71% downside protection and a 22.32% assigned return rate for a 63.00% annualized return rate (for comparison purposes only). Mobile Telesystems OJSC has a current annual dividend yield of 5.39%. [WBA-Seven Summits Research]