This morning, the Value Investment Fund a PUT contract on Essex Property Trust for 100 shares. The contract is for $10 a share netting $9 per share after fees of $1 per share. The expiration date is set for October 20, 2023 with a strike price of $200.00 per share. See this table:
For those readers unfamiliar with the company. Its intrinsic value is estimated at $280 per share and it peaked at $353 in March of 2022. As a real estate investment trust it pays more than 90% of its earnings as dividends. In two weeks, this company will issue a dividend of $2.31 per share and it is expected to continue this dividend payout each quarter. This is a highly desirable investment because at $200 per share, the annual dividend yield exceeds 4.5%.
The REIT’s pool on this website has this stock as a buy at $260 per share. Overall, the Fund desires to purchase this investment at $200 per share and will act on this if the price does drop to $200 per share in the interim period. Act on Knowledge.
© 2023, David J Hoare MSA. All rights reserved.
