Tanking stock I own: CENX

[BMF]

I bought CENX (Century Aluminum) a few years ago after it started tanking. My research indicated it was a solid company (not great, but solid enough) and it had dropped enough that I felt I could make a profit on a small comeback....well, it still hasn't come back (after the China tariffs issue was resolved). I got it at an average of $11.50/share (it's just over $6.00 now). I'm down around $5K. I figured 'wtf, I'm holding this'. It's mostly in my Roth IRA account, but I have a little in my brokerage. I have no issues w/ holding it, just wish it paid a dividend (in hindsight, I should have bought Alcoa).

Anyhow, thoughts on tanking stocks....when to sell....if holding is a good idea. Also, thoughts on this position?

(just starting this thread to give us something to talk about, this forum is a little slow)

 

[no1g8r]

While a day like today with a nearly 10% gain might make you think twice about what I’m suggesting, you could sell call options against the stock to generate some income from them until you want to sell them.

Right now, with the stock at 6.41, you could sell a Dec call option for every 100 shares you own, and collect $31. That’s 4.8% between now and Dec 20. If the stock goes up to $7 and your stock gets called away, that’s another $59 per hundred shares, 9.2%, and you’re rid of the stock.

if the stock doesn’t go up to $7, you let the option expire worthless and repeat the process again the next month. If the stock slowly moves up in coming months, you might get lucky and be able to sell the covered calls each month, collect the premium, and not have the stock called away while you earn the extra income.

The worst case scenario is that the stock jumps up beyond $7, and you lose any potential gains above the $7 per share price this month.

 

[FireFoley]

I am not familiar with that stock but being it is in aluminum I am sure it is in the cross hairs of any trade deal so I can't say anything. I have had my share of tanking stocks as I like to buy things that are out of favor but think they are good, legitimate companies. I have purchased two in the last 6 months, Same general industry but different models. Newell Rubbermaid (NWL) has finally awakened and is working well now. Tupperware (TUP) has been absolutely slaughtered and shows absolutely no sign of a pulse.even after a dividend cut. It still pays a 10% dividend at its current level but I think that is in jeopardy as poorly as the stock and company are performing.

 

[BMF]

While a day like today with a nearly 10% gain might make you think twice about what I’m suggesting, you could sell call options against the stock to generate some income from them until you want to sell them.

Right now, with the stock at 6.41, you could sell a Dec call option for every 100 shares you own, and collect $31. That’s 4.8% between now and Dec 20. If the stock goes up to $7 and your stock gets called away, that’s another $59 per hundred shares, 9.2%, and you’re rid of the stock.

if the stock doesn’t go up to $7, you let the option expire worthless and repeat the process again the next month. If the stock slowly moves up in coming months, you might get lucky and be able to sell the covered calls each month, collect the premium, and not have the stock called away while you earn the extra income.

The worst case scenario is that the stock jumps up beyond $7, and you lose any potential gains above the $7 per share price this month.

I'm too novice to at call options - it concerns me because I don't quite understand it. I'm a bit of a retard, and should stay out of stocks (sticking to mutual funds mostly). But I do some research and think I'm Warren Buffet occasionally - sometimes I get lucky and sometimes it tanks. Anyhow, I will read up on the call options and see if that's something I want to give a try. BTW, the stock closed at $6.89 yesterday (up another 7+% for the day - and I'm still way, way down)....

 

[no1g8r]

A lot of folks believe that if you wouldn't buy a stock at it's current price, you shouldn't hold the stock at the current price. You should sell it and free up the capital to buy something that you do believe is a good price.

With that said, if you would buy the stock at today's price, because you think it is a good value at the current price, you could BUY more shares. If you buy at today's price $7.03, you bring your cost basis down to $9.27/share. If you buy twice as many shares as you currently have, your cost basis goes down to $8.52

With all of that said, I believe the rebound that you are seeing is because Trump's team and China have been talking about lifting the tariffs. If this happens, you CENX stock COULD go up significantly. I'd probably hold on to what I have and see if that plays out anytime soon. If it does, great. If not, I'd use the covered call strategy to get rid of it once the dust is clear.

 

[FireFoley]

price,A lot of folks believe that if you wouldn't buy a stock at it's current you shouldn't hold the stock at the current price. You should sell it and free up the capital to buy something that you do believe is a good price.

With that said, if you would buy the stock at today's price, because you think it is a good value at the current price, you could BUY more shares. If you buy at today's price $7.03, you bring your cost basis down to $9.27/share. If you buy twice as many shares as you currently have, your cost basis goes down to $8.52

With all of that said, I believe the rebound that you are seeing is because Trump's team and China have been talking about lifting the tariffs. If this happens, you CENX stock COULD go up significantly. I'd probably hold on to what I have and see if that plays out anytime soon. If it does, great. If not, I'd use the covered call strategy to get rid of it once the dust is clear.

Thanx for your thoughts. I am in this boat and always consider any stock that I own is from the current day's closing price. If I am not comfortable holding it there I sell it.

 

[BMF]

Thanx for your thoughts. I am in this boat and always consider any stock that I own is from the current day's closing price. If I am not comfortable holding it there I sell it.

Have you ever held on to a losing stock...or just let it tank (kind of a "f*ck it!" attitude?).

 

[FireFoley]

Have you ever held on to a losing stock...or just let it tank (kind of a "f*ck it!" attitude?).

Sadly yes, LOL. I just mentioned one as I am sitting in TUP a total dog woof woof. But I did not buy it as a trade I bought it as an investment and it has turned into a BAD investment. I have plenty of losers, LOL. The one thing I do not do is that if I make a trade, I will not turn it into an investment if it goes against me. I think a lot of people make that mistake.

As an aside I am currently entering an order to sell my HPQ as we chat. XRX wants to buy them and there is no way I would buy this stock or want to hold it anywhere above 20. Thank you XRX.