Shares of Ansell (ANN) reached a 5-month high of $25.30 yesterday as a Chinese consortium agreed to buy part of their non-core asset group for $800 million.
In announcement after the agreement, ANN officials outlined a plan to buyback up to 10% of the company’s common stock over the next 12 months.
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We believe this development will underpin the share price to the downside. However, $26.00 could could be a difficult level to clear, even with the buyback.
With today’s sharp sell off into the $23.00 handle, ANN shares are a good candidate for a buy/write strategy. Selling the $26.50 calls into December will enhance the returns, and keep investors exposed to the August dividend of approximately 32 cents.
Ansell
