Las Vegas Sands (LVS) 11/20/09 PriceWatch Alert Targets 22.85% Return

Posted: Friday, November 20, 2009 8:30 AM EDT
By: Market Intelligence Center Staff

Las Vegas Sands (NYSE: LVS) closed yesterday at $16.95. So far the stock has hit a 52-week low of $1.38 and 52-week high of $20.73. Las Vegas Sands stock has been showing support around 16.23 and resistance in the 17.75 range. Technical indicators for the stock are Bullish and S&P gives LVS a neutral 3 STAR (out of 5) hold rating. LVS appears on the Investors Observer Volume Leaders list. For a hedged play on this stock, look at a Jun '10 12 covered call (LJJ FL) for a net debit in the $10.60 area. That is also the break even stock price for this trade. This covered call has a 211 day duration, provides 37.46% downside protection and a 13.21% assigned return rate for a 22.85% 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 LVS Jan '11 5 Call (ZAU AA) and selling the Jun '10 12 call (LJJ FL) for a $6.15 debit. The trade has a 211 day life and would provide 34.22% downside protection and a 13.82% assigned return rate for a 24.00% annualized return rate (for comparison purposes only). Las Vegas Sands does not pay dividends at this time. [FBB-Seven Summits Research]