Examining Warren Buffett's portfolio: Procter & Gamble

Procter & Gamble Co. (NYSE: PG) opened at $61.34. So far today the stock has hit a low of $61.01 and a high of $61.50. As of 10:50, PG is trading at $61.25, up $0.17 (0.3%).

After hitting a one year high of $66.30 in January, the stock has slowly lost ground over the past six months. PG shares make up nearly 11% of Warren Buffett's portfolio, making the company his fourth-largest investment. Buffett, the billionaire investor known for his extremely successful buy and hold strategy, sees long-term growth potential in the stock, so this flat-to-down period may be a good buying opportunity for those looking to jump on the Buffett bandwagon. Recent technical indicators for PG have been neutral and deteriorating, while S&P gives the stock a very positive 5 STARS (out of 5) strong buy rating.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $55 range. PG hasn't been below $55 since last June and has shown support around $61 recently. This trade could be risky if the stock's earnings (due out 8/3) disappoint, but even if that happens, this position could be protected by the strong support around $60.

Brent Archer is an options analyst and writer at Investors Observer.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls a long hedged position in PG.