PCG $45.25 +0.46 (1.03%)
Ideas, Updates & Analysis
Today I bought the PCG Jan 18 2019 50.0 Put @ $7.15 to close out the position.
This was a long 7 month trade.
Interestingly enough, the stock price today was $44.70.
The stock price did not move much since Fri, Jan 5, 2018 when it was at $44.29.
I sold the option at $8 and bought it at $7.15.
$8 - $7.15 = $0.85
$0.85 / $8 = 10.625%
The return on the option trade was a little over 10%.
If I had purchased the stock, the return would have been about 1%.
$44.70 - $44.29 = $0.41
$0.41 / $44.29 = 1% plus a couple of dividend payments. Oh wait, PCG suspended it's dividend.
So the stock price return would have been 1%.
This is a situation where selling a put performed better than buying the stock.
Thu, Jul 26, 2018 PCG @ $44.70
Anyone who lived in California knows about the October 2017 wildfires all too well.
Prior to the fires, this Dow Utility component was at $70 per share and paid a nice dividend.
After the fires, the stock is in the $40s and there are potential lawsuits that could cost the company hundreds of millions of dollars.
In December, the stock dropped more when the company announced it would stop paying a dividend.
So with all the bad news out there, I am hoping the stock won't go down any lower.
Also, it's not like we have a choice when it comes to who provides us service.
So I am betting PCG will come back although it may be later than sooner.
Since that may be the case, I'm selling a put instead of buying the stock.
There's no dividend right now anyway.
So I sold the PCG Jan 18 2019 $50.00 Put @ 8.00.
The stock price was at $44 a share at the time.
The bet is that the value of this put will decrease between now and Jan 18, 2019.
So, for example, if this put decreases to $6.00, I could buy it back and make a $2.00 profit.
If this put option stays at $8 or increases in value, I will let it expire.
What happens then is the stock will be put into my account at the strike price of $50 a share.
That could be bad if the stock is at let's say $40 a share.
Then I would be holding the stock with a $10 paper loss.
There is something else going on too.
Option prices are composed of 2 things, intrinsic value and time value.
One thing I have on my side is that the time value of the option will decrease as we get closer to January 18, 2019.
That is a good thing because I want the value to decrease.
The other thing is that the stock option does not necessarily move in sync with the related underlying stock.
Options have their own volatility because each option has its own open interest with buyers and sellers.
So I am guessing that the stock price of PCG doesn't really even need to move that much for me to buy this option back at profit.
Of course, it would be great if the stock actually moves up.
Fri, Jan 5, 2018 PCG @ $44.29
PG&E Stock Charts
The 5 year and 1 year stock charts are below.
50 Day Moving Average
The 50 Day Moving Average is at $42.62 which is 6.17% below the stock price of $45.25.
200 Day Moving Average
The 200 Day Moving Average is at 45.06 which is 0.42% below the stock price of $45.25.
Because both the 50 DMA and 200 DMA are below the current stock price, this can be considered a bullish technical indicator.
PCG Stock Price
Below are a few key dates for the stock price.
Year To Date
The most recent stock price is $45.25.
The Year To Date (YTD) return is +1.71%.
52 Week Low
The 52 Week Low stock price is $37.30 set on Fri, Feb 9, 2018 which is 192 days ago.
The current price per share is 21.31% above the 52 week low.
52 Week High
The 52 Week High stock price is $71.57 set on Mon, Sep 11, 2017 which is 343 days ago.
The current price per share is -36.78% below the 52 week high.
All Time High
The All Time High stock price is $71.57 set on Mon, Sep 11, 2017 which is 343 days ago.
The current price per share is -36.78% below the all time high.
Below is the EPS, P/E Ratio and Earnings Date.
The Earnings Per Share (EPS) is $0.23.
The Price To Earnings (P/E) Ratio is 191.84.
PG&E has a relatively high price to earnings ratio compared to the overal S&P 500 average, which is about 25%.
Some investors look for very low p/e stocks with the hopes of investing in an undervalued stock. Of course, this is just one factor to consider.
Stocks can make big percentage moves on the earnings announcement.
Companies announce earnings either before the market open or after the close.
The Earnings Release Date for PG&E Corp was Thu, May 3, 2018.
Since this earnings release 109 days ago, the stock price is down by -1.35%.
The most recent Earnings Release Date was on Thu, Jul 26, 2018, which was 25 days ago.
Since this earnings date, the stock price is up by +5.26%.
Below is important Dividend information.
PCG currently does not pay a dividend.
You may like this list of best dividend stocks of 2018.
Below are other Utility stocks as PG&E.
PCG Company Profile
Learn more about PG&E.
PG&E Corp is a Utilities stock that trades on the NYSE and has a market capitalization of $23.30 Billion.
PG&E is one of the 15 Dow Utilities.
PG&E Corporation is a holding company. The Company's primary operating subsidiary is Pacific Gas and Electric Company (the Utility), which operates in northern and central California. The Utility is engaged in the sale and delivery of electricity and natural gas to customers. The Utility generates electricity and provides electricity transmission and distribution services throughout its service territory in northern and central California to residential, commercial, industrial, and agricultural customers. The Utility provides bundled services (electricity, transmission and distribution services) to various customers in its service territory. As of December 31, 2016, the Utility owned approximately 18,400 circuit miles of interconnected transmission lines operating at voltages ranging from 60 kilovolt to 500 kilovolt. As of December 31, 2016, the Utility also operated 92 electric transmission substations with a capacity of approximately 64,600 megavolt ampere (MVA).
Spend a few minutes browsing the PG&E Corp, web site at http://www.pgecorp.com.