Monday, November 16, 2009
Genco Shipping (GNK) Update
Deutsche Bank upgraded select dry bulk shipping stocks this morning. In a research note this morning, the firm upped its target on Genco Shipping (GNK) to $31 from $24. As I type GNK is trading at $27.40.
RECAP: I've suggested GNK twice @ $22.90 with a covered call Jan $25 GNK-AE for $1.70 bringing the cost basis to $21.20. Also a second re-recommendation @ $19.50 & covered call GNK-AE @ $2.20 cost basis $17.30. If GNK is trading over $25 on Jan15th expiration the returns will be 19.7% & 44.5% respectively. If you were to sell today @ $27.40 on a non-covered call basis [$22.90 & $19.50] the returns would be +19.6% & +40.5%. Lets see where we stand as we approach expiration...if the stock declines along with time decay on the option premium, I may suggest rolling up & out or just letting the stock get called, we have about 8 weeks until that occurs.
This moning on CNBC: John Maccarone, CEO of Textainer, discusses the health of the shipping business and the overall economy. Mentions possible 'Inventory Restocking'...hmmm???
*click chart to expand image