27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Investors who owned stocks in the 2010s generally experienced some big gains. In fact, the SPDR S&P 500's (NYSE:SPY) total return for the decade was 250.5%. But there’s no question some big-name stocks did much better than others along the way.
AT&T’s Difficult Decade
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One underperformer of the last decade was telecom and media giant AT&T Inc. (NYSE:T).
AT&T’s decade was defined by two major buyout deals that significantly expanded the company’s reach into the media space.
In 2015, AT&T announced a $48.5 billion buyout of direct broadcast satellite service provider DirecTV. In 2018, AT&T completed an $85.4 billion buyout of media giant Time Warner and its subsidiaries, including CNN and HBO. Following the two massive buyout deals, AT&T now has nearly $200 billion in debt.
AT&T shares started the 2010s trading at $28.58 and hit their decade low of $23.78 by the middle of 2010. AT&T shares then went on a tear over the next two years, peaking at $38.58 in mid-2012.
From there, AT&T spent most of the next three-plus years trading sideways in a wide range of between $32 and $38. The stock finally broke out to the upside in early 2016. AT&T ultimately peaked at $43.89 in mid-2016, its high point of the decade. Since then, slowing growth and mounting debt have weighed on the stock.
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AT&T shares plummeted all the way down to $26.80 in late 2018 before rebounding once again to as high as $39.70 by the end of 2019
2020 And Beyond
AT&T shares were hammered in early 2020 during the broad market COVID-19 sell-off, and the stock dropped to as low as $26.08, its lowest point since 2010. While the stock has since rebounded to around $30, it has still delivered underwhelming overall performance over the past 10 years.
In fact, $1,000 worth of AT&T stock in 2010 would be worth about $2,065 today, assuming reinvested dividends.
Looking ahead, analysts expect AT&T’s rebound to continue in the coming months. The average price target among the 25 analysts covering the stock is $34.30, suggesting 15.3% upside from current levels.
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Photo by Tdorante10/Wikimedia.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.