10
May

Wrap – Week Ended 05/9/08 – (In Progress)

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Holdings Watch - Closed trades for the week. The Wiki and Performance Tabs are updated in the subscriber section. 

  • CHK May $50 Calls closed, up 262% since acquisition on 3/25,
  • CHK May $55 Calls closed, up 78% since acquisition on 4/29,
  • DVN June $125 Calls closed, down 1% to average costs since acquisitions on 4/22 and 5/5,
  • HK May $22.50 Calls closed, up 105% since acquisition on 4/29,
  • NBR May $35 Calls closed, up 120% since acquisition on 4/7,

Look for the rest of the May calls (of which there are now relatively few) to exit the building early in the coming week.

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1) Where To Be, Where Not To Be. E&P. That has been the answer year to date. Not financials. Not retail. Certainly not airlines. Not the safety stocks of old school Big Pharma, they're just sick. And not just any old energy company as the refiners continue to languish under the current triple digit crude environment. The independent refiners have all been beaten drastically and this is reflected in the tepid performance of the Majors and the XOI. No, the answer has been Exploration and Production which in the case of the names we traffic have had price, volume growth and cost trends on their side. Look for updates on more current thinking and valuation, price sensitivity, top producers 1Q08 growth tables etc in E&P and oil service in the week ahead as trends in these two spaces continue to evolve. 

2) Commodities En Fuego. The press gripes about the rising price of oil on an hourly basis. But high oil and commensurately high gasoline prices may turn out to be the least of the consumer's problems this Summer. Note the rally in Eastern, high BTU coal prices year to date. That's 50% of electricity generation going ballistic. Natural gas is another 20% of U.S. generation, up 50% YTD. Even spot uranium prices has spiraled higher (look for the impact to be felt in 2010 when many longer term contracts roll off). Speculators get the blame for the rally in crude and certainly they have played their part but there are fundamental pressures in each these fuels that are now only exacerbated by the possibility of a now perceived bottoming in the U.S. economy and subsequent recovery. 

3) Dry Bulk and Tanker Rates Continue To Recover. I took a hiatus from worrying about what this group of highly mo-mo names would do next after their last set of stellar earnings resulted in the group collapsing. They have since mounted incredible recoveries and I am left in the position of having missed the boat. More on this in the coming week. 

More to come a little later ... have a great weekend! 

4 Responses to “Wrap – Week Ended 05/9/08 – (In Progress)”

  1. 1
    coco Says:

    FYI- Dont know if u follow this Name but ECA is hosting a conference today (Happy mothers day)— Canadian papers running with the story and chatter that they may do a re org of the company…

  2. 2
    T-Tupp Says:

    on the canadian news tonight the alluded to the fact that they were spinning off the pipeline business… sounds like it would be a nice addition to enbridge’s portfolio

  3. 3
    T-Tupp Says:

    http://www.theglobeandmail.com/servlet/story/RTGAM.20080511.wrencana12/BNStory/energy/home

    i misunderstood the news, heres a report on business article about it

  4. 4
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