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