Summary
Newell Brands makes a wide variety of consumer brands most of us are familiar with and likely own.
A costly acquisition and poor results caused an oversold condition, allowing a value-based purchase of the stock in October, and still today.
Post-earnings the stock bounced nearly 25%, yet there is still value in the stock.
The stock is a good example of how to use covered calls to increase return and create a good income opportunity.
Newell Brands (NWL) manufactures consumer goods across a wide spectrum of products including baby, writing/office, camping, household and cookware. Many of their brands are recognizable as industry leaders like Rubbermaid, Crock-pot, Sharpie pens, Elmer's Glue, Coleman camping gear and Oster. Due to an expensive acquisition by then Newell Rubbermaid in 2016, the closure of Toys R Us and inventory drawdowns by customers, NWL has been in a decline for two years. Prior to a bounce in the past few sessions, Newell Brands stock had been battered, losing 37% in the past year. Some of this loss was warranted, as the company was extremely leveraged after the costly purchase of Jarden and the losses due to the Toys R Us closures and other challenging retail environments. However I saw a likely bottom before earnings, purchased shares and then wrote covered calls. Fortunately, my entry point was near the low point in October, but even after the post-earnings bounce, buying Newell Brands common and writing covered calls looks to be a profitable and potentially spectacular trade.
