No. of Recommendations: 11
SAP down to its lows again.
US listing $163.71 as I type.
For those who don't think that's quite cheap enough but still like the firm's prospects, you could write a January $165 put in the US for a premium of $21.90.
You don't know what outcome you'll get, but it will be one of:
* 15.3% cash return on the cash you commit to the deal (25.6%/year rate). You also earn interest on both your committed cash and the premium you collect up front.
* Entry on SAP stock at $143.10, 12.6% below the current price, 42% lower than the average price since the start of 2024. Depending on when it's assigned, you also get some unknowable mix of interest on your cash till then, and dividends after.
If they're earning at a rate of (say) $8 a share around year end, that would make the entry price around 18 times earnings. Their historical average is usually more like 22, occasionally over 40.
Last I heard, the business was still doing fine.
Jim
