The Fab 5 update

I came in to this week with an incomplete Fab 5 basket of stocks and the plan was to fill out the team. Here is a summary of what existed:

  • (3) Fab 5 stock positions ($COST, $DVA, &$WFM)
  • I was short the July 105 Call in $ALXN (this stock had completed the Roll and this was left over from the July Collar).

I entered a 1/2 position in $LH as the only new addition this past week. I spent most of my energy managing the existing positions and the option collars that were on for protection. Here is where things stand now as the week concluded:

  • $COST is the only Fab 5 position to survive the week. 4 slots to fill, yowza.
  • $DVA hits a trail stop on July 18 at $99.20 and was put in the “Not Complete” category. I did record a profit of $3.90 on the trade. This position did not have an Option Collar due to poor volume in the option chains.
  • $WFM took some energy to manage this trade. The Option Collar proved to be critical in softening the loss on selling the stock (as it should). I did a blog post here on the specifics. This trade concluded with a gain of $6.30 and was put in the “Not Complete” category. Here are a few twitter messages I posted as I unwound the trade:
  • The 1/2 position in $LH did not last long as it was hit with a downgrade. I did have a July 95/90 Option Collar on and this was critical in avoiding a large loss on the stock (-$4.80). I had collected a credit of $.45 on the Collar. The exit on the collar was to exercise the Put. I then closed that part of the trade for a gain of $5.00 on July 20. I  let the short Call expire. I managed a small gain of $.65 and this was put in the “Not Complete” category. A few twitter messages:

The new, very thin, Fab 5 as it currently sits:

Here is my current candidate list that I am working from:

  • $ALXN (will use a rule exception for another shot)
  • $ATHN
  • $DVA (will give another shot)
  • $LMCA
  • $MDVN
  • $ORLY
  • $SRCL

 

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