The LEAPS Trader
105 W. Monument Street
Baltimore, MD 21201
Monday, October 8, 2007
Email – #393
** Take A Flyer On This Turnaround Play
For the first time in years, insiders at Tenet Healthcare (NYSE: THC) are scooping up shares en masse. It does not hurt that the shares are trading at all-time lows. Tenet is counting on healthier times ahead as it puts a significant amount of bad press, bad management and weak credibility behind them. This operator of hospitals and health care services is banking on a return to profitability in the years ahead as it divests itself from unprofitable hospitals and poorly performing facilities.
Tenet is poised to surprise a lot of people over the next two years as it shows that its new management and focus on profitability and cost cutting will add value to shareholders. But this still remains a speculative company – regardless of all the good things happening at the company. Tenet has a lot of debt, is subject to headline risk, and subject to whatever news comes out of Washington in regards to healthcare.
Here is what you should do:
Buy the Tenet Healthcare (NYSE: THC) January 2010 $5 call options (YTX-AA) currently trading at $1.05. Do not pay more than $1.05 for this options contract. We will use a mental stop loss of $0.50 for this trade – I will, of course, update you on any changes.
I will be out of town, traveling to Asia for the next couple of weeks. I will be monitoring all of our positions frequently and will communicate any changes in our positions. Right now, I don’t see any issues that need to be addressed – we are sitting in good shape with exposure to all sectors at the right prices with a lot of time on our side.
Good trading,
Karim
Current Portfolio:
Company / Symbol: Bank of America (NYSE: BAC)
Option / Symbol: Jan. 10 $55 call (WBA AK)
Date Purchased: 8/29/07
Current Price: $5.40
Comment: Hold.
Company / Symbol: Sun Microsystems (Nasdaq: JAVA)
Option / Symbol: Jan. 09 $5 call (VSU AA)
Date Purchased: 8/1/07
Current Price: $1.42
Comment: Hold.
Company / Symbol: Mylan Labs (NYSE: MYL)
Option / Symbol: Jan. 10 $20 call (WYQ AD)
Date Purchased: 6/18/07
Current Price: $2.90
Comment: Hold.
Company / Symbol: Cirrus Logic (Nasdaq: CRUS)
Option / Symbol: Jan. 09 $10 call (VUR AB)
Date Purchased: 6/1/07
Current Price: $0.45
Comment: Hold.
Company / Symbol: Coeur D’Alene (NYSE: CDE)
Option / Symbol: Jan. 09 $2.50 call (ZYB AZ)
Date Purchased: 4/17/07
Current Price: $1.70
Comment: Hold.
Company / Symbol: Advance Micro Devices (NYSE: AMD)
Option / Symbol: Jan. 09 $35 call (VVV AG)
Date Purchased: 6/21/06
Current Price: $0.20
Comment: Hold.
Bull & Bear Spreads
Company / Symbol: GoldCorp (NYSE: GG)
Option / Symbol: Jan. 09 $30 call (OPJ AF)
Date Purchased: 6/9/06
Current Price: $6.20
Comment: Hold.
Company / Symbol: GoldCorp (NYSE: GG)
Option / Symbol: Jan. 09 $40 call (OPJ AH)
Date Purchased: 6/9/06
Current Price: $3.10
Comment: Hold. Sold call against January 09 $30 position.
Company / Symbol: Microsoft (Nasdaq: MSFT)
Option / Symbol: Jan. 09 $32.50 call (VMF AZ)
Date Purchased: 5/25/07
Current Price: $2.50
Comment: Hold.
Company / Symbol: Microsoft (Nasdaq: MSFT)
Option / Symbol: Jan. 09 $40 call (VMF AH)
Date Purchased: 5/25/07
Current Price: $0.55
Comment: Hold. Sold call against January 09 $32.50 position.
Company / Symbol: Chesapeake Energy (NYSE: CHK)
Option / Symbol: Jan. 09 $35 call (VEC AG)
Date Purchased: 5/25/07
Current Price: $6.50
Comment: Hold.
Company / Symbol: Chesapeake (NYSE: CHK)
Option / Symbol: Jan. 09 $45 call (VEC AI)
Date Purchased: 5/25/07
Current Price: $2.30
Comment: Hold. Sold call against January 09 $35 position.
