Buy Price: $17.37
April Put Option Price: $.75
We have finished our preliminary research and found Adobe Systems, Inc. (“Adobe”) to be a compelling investment at its current valuation. Adobe is a consistent, diversified market leader in the software solutions space with excellent cash flows from operations, growth potential, and a healthy balance sheet. Based on the recent volatility and decrease in the markets over the past two weeks, we are committing 4% of our portfolio to Adobe. In addition we are selling four put options expiring in April to purchase an additional 6% stake at $15 a share (if ADBE shares decline to this level), which we feel would be a very compelling price based on our initial analysis. As shown on our Master Spreadsheet, we are reserving the required cash to make this additional 6% purchase. We will complete our analysis and update with a full entry in the near future.
Bottom Line:
Long 4%
April put options at $15 per share for an additional 6%
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