Monday Mop-Up

That went about as expected.

My thanks to Stock and Options Trades for saving me the trouble of running through the remaining earnings for the week so I’ll just make a quick wrap-up here and concentrate on the earnings we REALLY care about.

Tuesday:

ADM – It won’t get much better than this for them as we have a perfect storm for profits in agriculture (they bought low and prices went crazy) so we expect ADM to make close to 50% more than last year’s .51 and Q2 should look good too. After that???
BP – We never got our puts as they were $5 for $65 puts with the stock at $69 (I was actually tempted to sell them for that price!) so we’ll see how they do.
GLW – Premiums were too high and we went with AUO (the Chinese GLW) June $20s instead, I think we got a nice entry at $1.20 but let’s watch these earnings carefully (should be up just over 50% from last year’s .28.
MA – We took a butterfly assuming no big move off $240. If it pops more than 10% one way or the other, we’ll have to scramble!
X – We shorted the May $145 puts against our July $145 puts, I really think costs are going to hurt these guys. Foreign steel companies are doing well but they have a stronger currency to buy coke and other costs with and a stronger local market and a lot less distance to ship.
VLO – This will be our best clue to XOM but no matter how well VLO does, they will be a mile from the $1.86 they earned last year (analysts are looking for .29, down from $1.35 expected for this Q after their last earnings). I think they might beat that but the headline is still going to be "VLO earnings off 75% on high oil prices."

After Hours Tuesday:

BXP – I am VERY concerned with this one as I invest in commercial real estate so I’m more concerned with their occupancy trends than anything else. These guys never miss so a miss would be shocking but a beat would be even more shocking so I like selling the overpriced $105s for $2.40 against the also ridiculous July $110s for $3.40 just playing for the value crush on the Mays.
BWLD – I wish we had bought these guys at $20, now at $26 they seem expensive but they are a 20% grower with a forward p/e of 16, exactly the thing you do want to own in this environment. Maybe if they miss, we could pick some up but the Sept $30s at $2 are a fun gamble with 29% of the float shorted in a thinly traded stock.
DWA – Are people buying DVDs?
LFG – You can’t buy a mortgage without title insurance but what happens to these guys when no one is buying mortgages? I simply cannot get to $36 a share with these guys and all those titles they did insure are getting foreclosed and LFG has liabilities on any unpaid liens that didn’t show up in due diligence, so we can expect claims to climb, especially on the past two years as more and more taxes went unpaid. I consider the Jan $30 puts to be a good gamble at $3.95 as it is VERY unlikely they will break past $40, costing us less than $1 but it is very possible they will fall more than $5 and give us a near double. FAF is 5/1 and FNF already was off 67% from last year but they are a much better company than FAF or LFG.
PNRA – How is a break/sandwich company going to do well with wheat prices at record levels? I love these guys and I’m hoping for a miss to buy them on and I wish I had bought them at $35 so I have no reason not to sell the June $40 puts naked for $1.50.

Wednesday Morning:

BHP – This is key to our OIH puts (which are now fully covered so we’re not sure what we want anymore).
CMI – We have the June $55s from last week, already up 50%. They went up so fast I never got to fill the position but I think I’ll take half off and sell 1/2 the $57.50s for $3.30 against my remaining June $55s, which we bought for $4 so that’s a 20% profit off the table and a free spread left over for earnings.
FSLR – Soooo tempting to short but the premiums are crazy. They are going to put up stunning numbers, no doubt and they are going to give good guidance because they are full of crap so I guess I’m hoping for a beat and a frenzy (which Cramer will be all over) and THEN we can short the hell out of them. Meanwhile, we may want to look at a butterfly if we’re bored today as the $290 puts and calls offer up $39 in premium.
GRMN – We got out on yesterday’s run. I’d love to get back in if they sell off today. My premise for these guys is they are down on TomTom’s poor earnings so we have another 20% grower with a forward p/e of 10. I think, barring a crazy sell-off below $45 which gives us a good price on the June $45s (maybe $4) I’d like to take the Jan 2010 $40s at $17 with a $10 premium and work off $1.50 of it right away by selling 1/2 the June $50s for $3+.
GM – Will someone not stop this thing?!? Hurry, hurry – step right up and watch this company lose the entire GDP of several 3rd World countries in a single quarter! It’s amazing, it’s astounding yet the management actually got a bonus last year. That’s right ladies and gentlmen it is possible to lose and average of 29% of your revenues for each of the past 5 consecutive years and still be considered a Dow Jones Industrial component. Hurry, hurry folks, you may never see the likes again!
HES – I knew we should have shorted them last week! Of course earnings will be great, they are an oil company, but up 120% from last Q1 great? I don’t think so… Again, I’d rather see them go up in a frenzy and then short them than take a chance on the crazy expensive puts.
IP – They should do well but I’m not sure I like them this year.
K – Shoud be interesting, also big costs issues.
KFT – Ditto.
NOV – I really think they miss. Last Q they barely held it together but got a big boost but now they are 10% over that boost so the June $60 puts are a fun gamble at $1.40 as they are down about 1/2 on a miss but better than a double if they miss.
PG – Big deal like GE
SI – Big deal like GE
TWX – We have the July $13s which have been flattish since Feb at $2.35 and we sold 1/2 the May $15s at .49, now .65.

So let’s strap in and see how these go. Every new report we get gives us clues to the next round. More fun tomorrow night as we do Wednesday night and Thursday morning.