Energy Stocks have really taken a beating this year – so I am going to have a go at Exxon Mobil Corp (XOM) which is down over 48% YTD. This is a very contrarian choice – everyone hates fossil fuel stocks these days. With a finger to the move towards ESG investing – I made the following trade:
- Sold: Ten (10) October 30, 2020 Puts
- Strike Price: $30.00
- *Premium Collected: $580.00
If I am forced to buy the 1000 shares, my entry price will be approx. $29.20 per share – over a 55% discount to Exxon Mobil Corp’s Fair Value of $74.00 per share – providing a comfortable Margin of Safety. Exxon Mobil Corp also pays a whopping 10.50% dividend.
*Excludes transaction costs.
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