Bunge is one of the three multinational corporate owners of EGT Development, the company that's trying to avoid hiring union longshoremen at the Port of Longview. Bunge reported $2.5 billion in profits in 2010.
Bunge (NYSE:BG) closed Tuesday’s positive trading session at $70.36.
In the past year, the stock has hit a 52-week low of $45.83 and 52-week high of $76.13. Bunge (BG) stock has been showing support around $68.25 and resistance in the $71.67 range. Technical indicators for the stock are Bearish and S&P gives Bunge (BG) a neutral 3 STARS (out of 5) hold rating. For a hedged play on Bunge (BG), look at the Sep ’11 $70.00 covered call for a net debit in the $67.41 area. That is also the break-even stock price for this trade. This covered call has a duration of 59 days, provides 4.19% downside protection and an assigned return rate of 3.84% for an annualized return rate of 23.77% (for comparison purposes only). A lower-cost hedged play for Bunge (BG) would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the Bunge (BG) Jan ’13 $35.00 call and selling the Sep ’11 $70.00 call for a total debit of $32.70. The trade has a lifespan of 59 days and would provide 3.78% downside protection and an assigned return rate of 7.03% for an annualized return rate of 44% (for comparison purposes only). Bunge (BG) has a current annual dividend yield of 1.33%. [THA-Seven Summits Research]