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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (12979)	6/28/2000 9:04:00 PM
From: virgil vancleave	Read Replies (1) \| Respond to of 14162

I actually have ames on my watch list and like yourself saw it about 2 years or so ago when it was at 4. I also watched it go to the 40's wishing I had bought. But as they say, hindsight is 20/20. The retail sector has been out of favor for a while now. Take a look at the charts of tom, anf, aeos, and a few others and you will see what I am talking about. The stocks have been beaten down so far that there is some real values showing up now. the chart of ames is actually resting on some weak support going all the way back to 1997. The valuation at present numbers shows ames is now undervalued and looking at the stock price action, people seem to be bailing as if the company is folding (which is quite doubtful). With a book value of 20, cash of $1.50 a share, and a price to sales ratio of .06, ames truly does appear to be undervalued. Only thing that bothers me with the current trend in interest rates is their debt to equity ratio, which is a 1.44. The company is making money and is projected to make over $2 a share next year. At under $8 a share, it really looks like a bargain. Looking at the chart, I would wait for the current downtrend to stop, with the price action leveling off or breaking the trend, especially since they just recently prewarned of slowing sales. All that being said, ames may well be an excellent covered call candidate. Hope this helps. Good luck

To: Dan Duchardt who wrote (12979)	6/29/2000 11:19:00 AM
From: Jonathan Thomas	Read Replies (1) \| Respond to of 14162

Dan, I'm stretched out a little thin, so I let ROST go. It never got to an entry point I would have felt comfortable with anyway, so it doesn't really matter. I was hoping it would skid under 15, and I could sell some 15 puts. I checked out AMES very briefly, and it looks like it's down for the count. EVERY indicator I saw pointed toward a downward bias. I was even looking for something, anything positive, and all I saw was the P/E. I'd rather keep my KM, at least they are profitable, and taking steps. I see a lot of AMES stores closing up shop in the past 10 years, and the ones that don't seem to have gotten run down. Don't let your previous mistake with this company cause you to make another one. Up to you, but I somehow ended up with too much stock in the retail sector (probably all the low P/Es) and I won't dive into any more... Ryan

To: Dan Duchardt who wrote (12979)	6/29/2000 11:48:00 AM
From: David Lind	Respond to of 14162

Dan, you are perfectly correct on AMES, IMHO. I ended up with 1000 shares after being put the stock on an NP, and have been writing calls for a few months. The more I looked into the company, the more attractive it became, and I have increased my position at these levels. They have an excellent operation appealing to a particular segment of the marketplace, and I have no doubt that it could be a double (or more) over the next 12-18 months. It is simply a good company that is in a temporary funk, also due to the overall weak retail sector. But I don't see much more weakness from here, signaling a good buy. -David