Corning (GLW) - Buy again $13.55

Since my last GLW position was a success.  I am deploying the cash to work again.  I still need to put in more time to study GLW.  I want to learn all the possible down side of their business.  Meanwhile, i will use Covered Call strategy to build up the position.

Looking from the surface, the numbers are very good.  And the management made it clear that they do have strategy and long term plan on hand.  Market sentiment toward GLW is very negative.  To me, that is a good sign.  I can normally buy it at deeper discount if a company lost its favor.

2/22/2012 GLW 13.55 5/19/2012 1.195 75.9 13 80 4.76% $5,084.10 87 19% $108,400

I bought 8,000 shares again.  Unlike last time, this time, i sold in the money call.  Strike price is still $13.  That gives me more downside protection.

If success, it will get called away and i will realize 4.76% profit in 87 days.  Or annualized 19%.  This is not awfully high.  But i rather give up some return for safety.

If GLW is trading below $13 by 5/19/12, then, i got to keep the premium and stock.  That will bring my cost down to $12.355.  That's a level that i don't mind holding.   Knowing they will have a poor Q1, i think the chance of price drop below $13 is rather high.  We will see.

Meanwhile, I will budget more time to study GLW

Corning (GLW)- What can go wrong and how much they worth

I am determined to dig out all the info i can find.  After factor in all the negatives, I should be able to come up with a minimum price for GLW.


1.  Tax rate for Q1 2012 will be 20%.  As oppose to Q4 2011's 15%.  Therefore, we will see some impact toward net earning.

2.  Display section's profit will drop significantly.  And Display section contribute 80% of the company's total profit  (How much is significant?  I need to find out)

Corning (GLW) - Start buying - $12.65

  I learned from Buffett that when a stock is at deep value, it will be scream at you.  You will not miss it.  Now, today, Corning is at $12.65, not quiet screaming yet.  But it is making big enough noise for me to buy in.

I own GLW stock before, I exited the position when it touches $20.  So, i know some general info about this company.  What trigger my purchase decision today is purely its price.

Their recent quarter shows their earning is dropping.  Despite their revenue growth is record breaking.  I believe that is the main reason why the stock pull back.  I will do more research later.  So far, the management shows me that they consistently innovate and guiding the company to the right direction.  Therefore, any short term hiccup only create good opportunity to buy-in

It is taking me long time to fully evaluate GLW.   All the surface number looks good enough.  But I want to protect my investment while I am studying it.  So, I am doing the usual Covered Call strategy.

Bought 8,000 shares of GLW at $12.65 each.
Sold Feb $13 call for $0.2 premium

Although i believe this company is worth a lot more than $13 in next 2 years.  I am setting $13 because (A)  it is only 22 days holding period  (B)  It is not impossible the stock will drop below my entry point.  Consider they will have a bad Q1 2012

If my position get called away, my investment is generating 4.35% in 22 days.  Or annualized 70% return.  I should not complain about that kind of return.

If stock price remain below $13 on Feb 18, i will keep the stock and I will still be very happy.  Because it means I am getting GLW for 12.45 ($12.65-0.2=12.45)

I am reserving some cash and will buy 2nd batch of GLW if it fall near $11/share.  This can be a good long term value hold.


Update :  2/18/2012  This position successfully call away.  Reaching my desired return