Hasbro (HAS) 11/20/09 PriceWatch Alert Targets 10.04% Downside Protection

Posted: Friday, November 20, 2009 8:39 AM EDT
By: Market Intelligence Center Staff

Hasbro (NYSE: HAS) closed yesterday at $29.37. So far the stock has hit a 52-week low of $21.14 and 52-week high of $30.32. Hasbro stock has been showing support around 28.64 and resistance in the 30.36 range. Technical indicators for the stock are Bullish and S&P gives HAS a positive 4 STAR (out of 5) buy rating. HAS appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at an Apr '10 27.50 covered call (HAS DY) for a net debit in the $26.42 area. That is also the break even stock price for this trade. This covered call has a 148 day duration, provides 10.04% downside protection and a 4.09% assigned return rate for a 10.08% 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 HAS Jan '11 20 Call (VSJ AD) and selling the Apr '10 27.50 call (HAS DY) for a $6.95 debit. The trade has a 148 day life and would provide 8.24% downside protection and a 7.91% assigned return rate for a 20.00% annualized return rate (for comparison purposes only). Hasbro has a current annual dividend yield of 2.68%. [FBB-Seven Summits Research]