For 
his Cash Flow portfolio, Covestor model manager Jose Betancourt conducts fundamental analysis to find companies with high free cash flow and negative net debt. Current top holdings include ChinaCast Education (CAST), Tellabs (TLAB) and Theragenics (TGX).
On March 14, Betancourt added a new position in Tellabs (TLAB), which is engaged in designing and marketing equipment and services to communications service providers. OptionMonster recently noted that TLAB has recently experienced strong put sales:
optionMONSTER’s tracking systems detected the sale of more than 28,000 June 5 puts for $0.30 and $0.35. Volume was 10 times existing open interest in the strike.
The transaction represents a giant bet that the maker of telecommunications gear will hold its ground. If the trader is right, he or she will get to keep the credit earned. If they’re wrong, they’re on the hook to buy more than 2.8 million shares.
…
Value investors could also think TLAB is now attractive because its enterprise value is less than three times EBITDA–far less than related companies such as Cisco Systems or Juniper Networks.
TLAB climbed immediately after the puts were sold. That probably resulted from purchases by the market marker who had bought the puts and thus needed to hedge an implicitly short position in the name.
On March 15, Betancourt added a new position in Vimicro International (VIMC), a multimedia semiconductor and solution provider. This comes on the heels of a December 31, 2010 announcement from the company that it would restructure to divest of money losing divisions:
[T]oday announced it has entered into definitive business restructuring agreements to divest certain non-core business lines and land use rights as part of its previously announced cost control initiatives. The Company expects this divestiture of loss generating businesses and undeveloped assets to improve its operating performance and financial strength, further enabling Vimicro to focus resources on its new growing surveillance business.
On 3/22, TLAB gained 0.61% and VIMC fell 0.34%.
Sources:
“What put sellers are seeing in Tellabs” David Russell. OptionMonster, 3/17/11. https://finance.yahoo.com/news/What-put-sellers-seeing-optmonster-1938110355.html?x=0&.v=1
“Vimicro Announces Business Restructuring” Vimicro International Corporation, 12/31/10. https://finance.yahoo.com/news/Vimicro-Announces-Business-prnews-3131736188.html
