21
Sep

Wrap – Week Ended 9/20/13

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Hockey Stick Watch: The second half of 2013 has, so far, been good to us. Year to date:

ZLT A up 42.9%

ZLT B up 41.8%

ZLT C up 45.3%

Not patting ourselves on the back but just making a comment (see #1 circle below) because it's important to note the hockey stick turn in performance. The last few weeks have seen many of our names (including half -----of our top 10 names) go to 52 week and / or all time highs. While valuations are in most cases not yet stretched (see the quarterly Why I Own, What I Own update that was done this week here), they are beginning to discount some of the multiple expansion we normally expect to see following the shift in estimate focus from the near year to the out year set of numbers. That's fine. That's how things are supposed to work for our growing batch of 30 or so names in the ZLT.

However, nothing goes up in a straight line and we see signs of euphoria among the talking heads and signs of hot money within the group. That's fine too but hot money doesn't marry and it doesn't even really get to know what it's infatuated with. It's more like a speed dater. Hot money goes for the sexy ticker but when said sexy ticker takes a breather hot money dumps it to move on to something else it really doesn't know a lot about from biowrecks to financials to housing stocks to gold ... etc.  

So we thank hot money for visiting and after nearly 5 weeks of no trades in the ZLT (we've been essentially fully invested since late Spring), we took some Trading position profits in the face of this group strength (see below). Again, as we stated in recent weeks, we used the euphoria of others to help balance some of our positions that had become overlarge due to, well, the euphoria of others. We're not saying they're wrong in buying into names we've owned as Cores in many cases for years (and we're selling Trading positions, not Core positions and those Trading positons as you'll see below, were anywhere from 3 to 12 months old).  We're just creating a little firepower to redeploy later this year. As always, all of our trades are shown as they are completed.  

 

Holdings Watch:

Balancing trades – These are the long awaited balancing trades. Nothing against the names being sold back as we are just taking a few Trading shares off the table but are not touching the Core positions. 

  • 9/20/13 - OAS – sold trading position taken November 2012 at $30.11 and December 2012 at $31.37 and May 2013 at $35.65. Sold for average $44.95. Still a top 5 position. 
  • 9/20/13 - TPLM – sold trading positions taken September through December of last year from $5.95 to $7.30. Sold for average $9.76.  Still a top 5 position post sale.
  • 9/20/13 - BCEI – sold the trading position taken in April 2013 at $33 for average $48.26.  Still a top 5 ZLT position.
  • 9/20/13 - KOG –  sold one of the trading position added in July 2013 (in anticipation of the 2Q13 news items on the cubed spacing test) $9.30. Sold for average $11.32.  We continue to own a full Core and trading positions here. 
  • 9/20/13 - CLR – sold the trading positions taken October 2012 at $71.27 for $101.14.  We still hold a Trading position and a full Core here, but it's just outside of the ZLT top 10. 

The Blotter is updated here

The ZLT Pie Charts will be updated in the Monday post. 

 

3) Special Guest:  We'll have a subscriber conference call with Gastar (GST) this Wednesday. If interested please contact us at zman@zmansenergybrain.com.

4) Want to learn more about Zman's Energy Brain? Please see How To ZEB here.

 Off to soccer, then watching a lot of football. Have a great weekend!

wrap 092013

21 Responses to “Wrap – Week Ended 9/20/13”

  1. 1
    Wayne G Says:

    Soros Fund Management Reports 9.57% Passive Stake in PVA

  2. 2
    sea bull Says:

    Z – When you model a company it seems that you boil it down to the ratio TEV/EBITDA.  I know I have read bits and pieces of your thoughts on how to evalute a growing E&P name.  I'm sure you have previously explained the reasoning behind your modeling method.   Is there one entry in the archives you can direct me to where you summarize your thoughts on how to evaluate these companies?  Also, what is your TEV/EBITDA level to consider a stock "cheap"?  Thanks

  3. 3
    zman Says:

    sea bull – thanks for the question but in and out of pocket today, we'll address in the Monday post. 

  4. 4
    tomdavis12 Says:

    Zero Joe can't catch a break. Barrons positive on AREX as well as NFX.  Poor Joe

  5. 5
    tomdavis12 Says:

    Z: Transport day rates stronger (like you circled). Any way to play? DRYS has a conv bond. 5% 12/1/14 trades at a discount.

  6. 6
    snuhart Says:

    RE 4  TomD   Please be kind enough to summarize the essence of

    comments in Barrons re NFX

  7. 7
    501xx Says:

    Below is the final quote. Long discussion noting asset sale, increased oiliness … in essence nothing more than Z has said for months.

    "Investors will take a shine to Newfield … as the funding gap goes away and domestic production ramps up. Once the balance sheet is repaired, the valuation discount will narrow ….

    It's getting tougher and tougher to find undervalued stocks in this bull market, but Newfield might be one of them."

  8. 8
    snuhart Says:

    RE 7 501xx  Thank you . Much appreciated.

  9. 9
    zman Says:

    re 5 – thanks, yeah, let me start to address that in the Monday post. 

    re 4 – thanks, nice.  That NAV correction earlier in the week was just wow-large. 

    re 7 – ha, thanks, sounds pretty familiar, no?

  10. 10
    Dedwards Says:

    GST presentation from Imperial worth a read http://files.shareholder.com/downloads/GST/2652568733x0x691214/8f237664-323b-4af5-8cb0-307fcf5eb307/Imperial%20Capital%20Global%20Opportunities%20Conference..pdf

    Nice well data from Marcellus – Slide 14 

    Making connection of their WV acreage to Utica – Slide 16 (which is smart given recent attention to Utica)

    Breakout of Hunton holding – Slide 18 (they are in Garfield county where DVN had the monster well last week, but the one Garfield well has been weak so far)

    Locations of Hunton wells drilled to date and currently drilling – Slide 21

    5th Hunton well has stuck coiled tubing, flowing from only 8 (of 20) stages, still 300 boepd – Slide 23

    Acquired Hunton Acreage (WHELU) well economics – Slide 26

  11. 11
    brodway Says:

    501xx..

    undervalued is a matter of perception. the fact that energy equities (i'm assuming this is what you were reffering to) have been rising in the last several months doesn't necessarily make them expensive, just priced higher. you have to consider that many companies that finally started to see gains in share prices did not participate in the market rally earlier in the year and even before the correction in November last year. they are playing catch up now, and those that have come to the table now, only realize how inexpensive many names really are. i remember OAS was sitting at 28 for a long time before it started moving higher. the markets have a herd mentality and often times the exuberance can last several quarters before corrections occur.

    it seems to me at least that there seems to be a rotation into the energy sector and some of the gains we've seen over the last few months seems to be a reflection of this.  but what's not be missed, is that American oil is a GROWTH story. equity markets like growth and they pay a premium for it. maybe other sectors are getting toppy and pricey, i think oil has just begun its move higher. Zman has a saying that i'm going to borrow for the sake of clarity…."they will like them higher".

     

  12. 12
    501xx Says:

    11 – I understand that.  I was merely quoting the Barron's article by staffer Vito Racanelli who in turn was quoting interviewee Jonathan Raleigh, a portfolio manager at Longbow Capital Partners.  The article also states Longbow has been buying shares. Raleigh was talking his book, of course. 

  13. 13
    brodway Says:

    re: 12 

    was just thinking out loud in response to that quote. it was only a few months back that Z said NFX is his sleeper of the year. it may just wake up next week and not look back

  14. 14
    Zorgnak Says:

    S&P Demand Volume . 

    Daily… Extended….

     http://i1223.photobucket.com/albums/dd503/zorgnak/SP920_zps1639678d.png

    Weekly  Longer term demand volume trend intact.

     http://i1223.photobucket.com/albums/dd503/zorgnak/SP920Wkly_zpsfe564fec.png

  15. 15
    Zorgnak Says:

    E&P Demand volume

    Daily  Off the chart demand volume surge now rolling over a bit. Price uptrend still intact.

    http://i1223.photobucket.com/albums/dd503/zorgnak/ZLT820_zpse2138164.png

    Weekly  Strong demand volume uptrend still in place

    http://i1223.photobucket.com/albums/dd503/zorgnak/ZLT920Wkly_zpsd447bcc4.png

     

  16. 16
    Zorgnak Says:

    SPY  Volume Profile

    Weekly…Long term upside bias intact above 167. 163 near support in long term up trend.(A break below this reaction low would put in a double top) 153.46 Key support for long term uptrend..

    http://www.charthub.com/charts/2013/09/22/stock_master_weekly_130922134024

  17. 17
    Zorgnak Says:

    XOP  

    Long Term Profile Uptrend intact. Tapping at breakout. Bulls need to see a sideways consolidation above the previous reaction low at 60.18. 

    http://www.charthub.com/charts/2013/09/22/stock_master_weekly_130922134719

  18. 18
    Zorgnak Says:

    XOP Daily  Near support 63.37. Back into the volume base below 60.18. Demand volume still positive but extended.

    http://www.charthub.com/charts/2013/09/22/stock_master390_130922135611

  19. 19
    zman Says:

    Thanks for the levels Zorg, helpful stuff. 

  20. 20
    Dillon Says:

    Z – what would you consider gulf coast refiners? I guess I should say which companies?

  21. 21
    zman Says:

    re 20 VLO,  PSX, MRO, and then lots of names there in smaller ways than those. 

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