Note to readers:
This is a watch list only! I write this down as I am doing my weekend reading and I only make the plays if there are no changes of conditions etc. during the next week.
Always feel free to check in comments for actual trades or ask any time about any position I mention!
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The bulk of CW is that the Big 3 auto group is close to settling with the unions. They are looking for a 25% decrease in health care payments, severe pay cuts for new hires and rolling pensions into 401K plans.
But I don’t think the unions just spent $100M on the election to give up those points very easily! Let’s watch GM, F and DCX very closely for signs of a breakdown in negotiations.
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Wages are up sharply over last year and marginal retailers will get clobbered if the season comes in light so please send in any suggestions in that space (Gap springs to mind).
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Pennslyvania was once a vibrant oil and gas state but thousands of “marginal” wells were abandoned years ago as $20 oil did not produce enough profits to justify running rigs there.
In the first half of this year 3,600 drilling permits have been issued which will bring active wells up from 44K in 2004 to 56K by the end of 2006.
This mirrors the national surge in drilling as there will soon be 45% more active wells in the US than the 302,000 in 1999.
CHK just bought Columbia Natural Resources of VA for $2.2B and last month started capping wells to get a handle on the natural gas glut. Let’s keep an eye on active wildcat operations in Ohio, Mich, Ark, IL, and LA – all places that are less actively patrolled by the majors for some upside opportunities, even if prices pull back a bit.
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HRL (Spam!) raised guidance to a shocking .64 vs .59 expected, that’s an 8%+ beat and, although they sold off later on Friday, I think there’s plenty of gas in this tank for a nice move up.
“After assessing the industry factors and our business plans and prospects for fiscal 2007, we are also providing a fiscal 2007 guidance range of $2.15 – $2.25 per share. While the higher grain markets are expected to be a burden to our business in 2007, we are excited about the growth opportunities from our value-added business. We will provide more details about the quarter and the fiscal 2007 outlook on Wednesday, Nov. 22, 2006, when we release our fourth quarter earnings,” CEO Ettinger concluded.
Jun $40s are $1.10 but only worth a try in a good market.
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NFG lowered 2007 guidance by 10%+ as they write down reserves. I’m not taking on any more energy puts, but $38 ($3.2Bn) seems like a lot of money for a company that only made $110K last Q and is guiding down.
Jan $35 puts are .35
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ATVI shot up yesteray on news of stronger game sales. They are projected to lose .10 this Q (Monday pm) but ERTS was way up and the PS3 is finally out so I’m going for the Jan $16.88s for $1.10 and spending an additional .10 on disaster insurance with the Nov $15 puts.
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NTFY is a Blackberry support product with 49 employees and a negative balance sheet but they’ve got good stuff and I’m taking a small position at .21 ahead of Monday’s earnings.
This is a rare case where I like the fact that the executive staff take $1M in salaries as they have $5M in sales and are losing $500K so they may be an attractive buy-out down the road.
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Speaking of products that are like crack (Blackberry), KNOT is worse than heroin for girls planning a wedding. It sold off 15% from its high and looks very weak but I think they beat and even if they don’t I think they get bought out a la MySpace and YouTube as you can’t beat the demo of getting every woman in America to hit your site at least once! No options but I’ll start owning at $22.13 and see how it goes.
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FHCO reports Monday and should turn a profit. Female condoms are strictly a 3rd world thing but aids fighting is back in style after 6 years of neglect and these guys make a nice play at $1.23.
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BLSI is a Michael J. Fox Parkinson’s company that just snaps its fingers anytime it wants money. They are going to do a 20% dillution so no buying but I’ll be interested in the CC.
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TSN has very low expectations and we have to get out of CAG if they do well as the expectation is costs are getting away from them both.
We’re holding the stock at $13.90 having sold the Jan $15s against it, I’ll be pleased if it goes up and makes $1.10 for us but also surprised!
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DKS should beat on Monday night. The Fall sport season was warmer than usual so more demand for equipment could be expected. Too bad they are already up 40% for the year but I’ll take the Jun $50s for $4.30 and sell the Jan $50s for $2 and take the Dec $45 put for .55 just in case!
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BJS (Tue) needs to be watched ahead of COST (12/14).
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Counting on HD (Tue) to save LOW calls (11/20).
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If gold doesn’t fall below $615 then GG (Tue) seems easy as gold is roughly $125 an ounce more than it was this quarter last year but GG is is only expected to earn double. I have to think that extra $125 is pretty much all profit! The $30 is .20 for a crap shoot but I like it!
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LZB is just not high end enough for the Consolation Prize Team but I think they’ll beat Tuesday.
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Warren Buffet says never buy an airline but ZNH (Wed) is growing like crazy and if the transports hold their levels, I like this for $18.50.
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Boeing Buddy TIE got too cheap so I’m getting a few Jun $25s for $7 but hopefully a little cheaper if it tests $28.
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As I’m looking through the retail sector, there are a ton of puts if the numbers start heading south – many of the ones I’m looking at are very stretched. PLCE comes to mind.
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Thursday is huge with HPQ, DELL, ADSK, MRVL, CRM, SBUX, SHLD, BKS. Also GMCR, who I like, and Consolation Prize Member WSM, who will beat.
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Friday is just ANN so it’s all up to the Thurday group to set the end of the week!
