FWLT $150.77 +15.77 - Foster Wheeler
We got an outstanding pre-earnings entry on Tuesday at our target of $135. On Wednesday Foster reported earnings that soared +70% due to strong growth in international operations. Analyst estimates were averaging $1.35 compared to the $1.78 the company reported. They have $6.2 billion in back orders and sales were up +54%. The board just approved a 2:1 split subject to shareholder approval around January 8th.
Foster Wheeler Ltd. operates through two business groups, which also constitute its segments: Global Engineering and Construction Group (E&C Group), and Global Power Group. The Global E&C Group designs, engineers and constructs onshore and offshore upstream oil and gas processing facilities, natural gas liquefaction facilities and receiving terminals, gas-to-liquids facilities, oil refining, and chemical and petrochemical, pharmaceutical, biotechnology and healthcare facilities and related infrastructure, including power generation and distribution facilities. Global Power Group designs, manufactures, and erects steam generating and auxiliary equipment for electric power generating stations and industrial facilities worldwide. On April 7, 2006, the Company completed the purchase of the remaining 51% interest in MF Power S.r.L., a joint venture that was 49% owned by the Company's Global E&C Group prior to the acquisition.
Breakdown trigger: $135 hit 11/06
Position: 2009 $150 LEAP Call ZHF-AW @ $29.10
FXI $182 -8.00 iShares FTSE/Xinhua China 25 Index Fund
The FXI rolled over on weakness in the Chinese markets and came to rest on the 50-day average. Hopefully this is where it will make a stand. The entry was triggered at $190 but the drop continued. Friday saw a slight rebound intraday but more selling at the close. The FXI has PTR, CEO and SNP as components making it an energy mutual fund with 22 other China stocks for added benefit.
iShares FTSE/Xinhua China 25 Index Fund (the Fund) seeks investment results that correspond generally to the price and yield performance of the FTSE/Xinhua China 25 Index (the Index). The Index is designed to represent the performance of the largest companies in the China equity market that are available to international investors. The Index consists of Class H and Red Chip shares of 25 of the largest and most liquid Chinese companies. Securities in the Index are weighted based on the total market value of their shares. Each security in the Index is a constituent of the FTSE All-World Index. All of the securities in the Index trade on the Hong Kong Stock Exchange. The Fund invests in a representative sample of securities included in the Index that collectively has an investment profile similar to the Index. The Fund s investment advisor is Barclays Global Fund Advisors.
Breakdown trigger: $190 hit 11/05
Position: 2009 $210 LEAP Call VHF-AA @ $32.50
PTR $201.89 +7.57 - PetroChina
After a $75 drop on profit taking we finally got an entry on PTR once again. The entry target was $190 and the stock declined to 190.32. Before I could get an email alert out to readers PTR rebounded to $194. The impact on the LEAP was minimal since it had not really adjusted to the low level from its recent price drop. PTR was called the first trillion-dollar stock last week after going public in Shanghai for $9 billion. Exxon is the second largest at $488 billion in market cap. Petrochina is seen as the figurehead for the Chinese stock market bubble. With earnings only half that of Exxon but twice the market cap it suggests one of those valuations is terribly wrong. Obviously it is PTR but with 1.3 billion wannabe investors in China and the Shanghai share price of only 59 cents it is very easy for buyers to afford it even at the trillion-dollar market cap. Granted there is a lot of fluff in PTR right now but eventually the Chinese markets will rebound.
PetroChina Company Limited (PetroChina) is engaged in a range of activities related to petroleum and natural gas through its four business segments: Exploration and Production, Refining and Marketing, Chemicals and Marketing, and Natural Gas and Pipeline. The activities include the exploration, development and production of crude oil and natural gas; the refining, transportation, storage and marketing of crude oil and petroleum products; the production and sales of chemical products, and the transmission, marketing and sales of natural gas. PetroChina Company Limited was established as a joint stock company as part of the restructuring of the China National Petroleum Corporation (CNPC). CNPC is the controlling shareholder of the Company with 88.21% shares.
Breakdown trigger $194.32 Entered on rebound from $190 on 11/08
Position: 2009 $220 LEAP Call ZJK-AZ @ $32.20