HW - $35.27 - Headwaters ** No Stop **Play Title
HW is still holding over support at $35 and waiting for the market to resume its upward trend. The drop in oil prices failed to dent HW materially but we do need a positive spurt to revive a declining trend.
They also make building materials and a cement substitute that uses this ash to make concrete more durable. Considering the thousands of tons of ash generated each week this appears to be a gold mine for Headwaters. When electric plants fight the tons of daily ash Headwaters is there to help and converts that ash back to dollars. This sounds too good to be true and I think that was the real problem with the decline from $46 in August to the $30 level in October. The ramp from IPO in April from $30 to $46 and decline back to $30 is complete. Those that got in on the good IPO story took their profits as energy prices declined. Now may be the time to jump back on the coal train with Headwaters rather than Peabody.
Headwaters Incorporated is a diversified company providing products, technologies and services to the energy, construction and home improvement industries. Headwaters conduct its business primarily through four business units, including Headwaters Resources, Headwaters Technology Innovation Group (HTI), Headwaters Construction Materials and Headwaters Technology Innovation Group. In September 2004, the Company acquired Tapco Holdings Inc., a manufacturer of building products and professional tools used in residential remodeling and construction. In June 2004, the Company acquired Eldorado Stone, LLC, a manufacturer of architectural manufactured stone based in San Marcos, California. Eldorado Stone is being purchased from Graham Partners, a middle-market private equity firm. Eldorado Stone will be integrated into Headwaters' coal-based construction materials operations.
2007 $40 LEAP Call ZPP-AH @ $4.30
Entry $35.50 (11/22)
BP - $67.11 - BP Plc. ** Closed **
BP held above support at $67 on Friday's sell off after setting a new two month high over $69 on Tuesday. This was surprising due to a sudden sale note from Kuwait. The Kuwait Investment Office in London, a Kuwait government agency, signed a consortium of banks to sell 185 million shares of BP. This represents 0.9% of the outstanding shares. Kuwait will still own 2.56% of the company after the sale. Kuwait said the sale was part of a portfolio rebalance program of its international investments. Since BP only averages about 3.5 million shares per day this could be a huge problem ahead. While the shares are not expected to be sold into the open market they will be tough to unload without weighing on the price.
I elected to close the position for a -0.30 cent loss rather than speculate on the impact of the future sale.
BP p.l.c. is an oil company trying to remake itself into an energy company. The operating business segments were Exploration and Production; Refining and Marketing; Petrochemicals, and Gas, Power and Renewables. Exploration and Production's activities include oil and natural gas exploration and field development and production, together with pipeline transportation and natural gas processing. The activities of Refining and Marketing include oil supply and trading, as well as refining and marketing. The Petrochemicals segment ceased to operate separately as of January 1, 2005. Gas, Power and Renewables activities include marketing and trading of natural gas, natural gas liquids , new market development and liquefied natural gas (LNG), and solar and renewables. The Company formed the TNK-BP joint venture between the Company and the Alfa Group and Access-Renova (ARR). In addition, it plans to incorporate AAR's 50% interest in OAO Slavneft, a Russian oil company, into TNK-BP.
2007 $70 LEAP Call VAO-AN @ $5.20, exit $4.90, -0.30
Put Insurance: April $60 Put BP-PL (Cancelled - No Entry)
Entry $66.43 (11/20)
CHK - $31.14 Chesapeake Energy ** No Stop **
CHK is holding just below its current resistance at $32 and lost only -31 cents on the Friday selling. If gas continues higher the next resistance level is $35. CHK dipped to just under $30 on Thursday when it announced it was going to sell 20 million shares and use the proceeds to retire debt. That dip was promptly bought and the stock ended higher on the day at $31.45.
Chesapeake Energy Corporation is an oil and natural gas exploration and production company engaged in the acquisition, exploration and development of properties for the production of crude oil and natural gas from underground reservoirs and the marketing of natural gas and oil for other working interest owners in properties that it operates. The Company's properties are located in Oklahoma, Texas, Arkansas, Louisiana, Kansas, Montana, Colorado, North Dakota and New Mexico. The proved oil and natural gas reserves as of December 31, 2004 were approximately 4.9 trillion cubic feet of gas equivalent (tcfe). At December 31, 2004, approximately 89% of the Company's proved reserves (by volume) were natural gas, and approximately 70% of its proved oil and natural gas reserves were located in the primary operating area, the Mid-Continent region of the United States, which includes Oklahoma, western Arkansas, southwestern Kansas and the Texas Panhandle.
2007 $35 LEAP VEC-AG @ $4.00
Entry $29 (11/04)
UPL - $57.96 Ultra Petroleum ** Stop loss $54 **
UPL moved higher for the week and was one of the best performers in the gas sector. It is still stuck at resistance at $59 with the all time high at $60. One more good gas spike and we could be off to the races. They increased their CapEx budget +47% to $425 million for 2006. 93% or $395 million will be spend developing the very prolific Pinedale Anticline. Approx 165 new wells will be drilled at that location in 2006.
I raised the stop to $54.
Ultra Petroleum Corp. is an oil and gas company engaged in the development, production, operation, exploration and acquisition of oil and gas properties. The Company's operations are focused in the Green River Basin of southwest Wyoming and Bohai Bay, offshore China. During the year ended December 31, 2004, it owns interests in approximately 166,974 gross (92,997 net) acres in Wyoming covering approximately 260 square miles. The Company owns working interests in approximately 241 gross productive wells in this area and is operator of 41.5% of the 241 gross wells. Through Pendaries Petroleum Ltd., it is active in oil and gas exploration and development in Bohai Bay, China. The Company also owns interests in 15,518 gross (14,652 net) acres in Pennsylvania, as well as interest in approximately 720 gross (320 net) acres and interests in three productive wells in Texas.
MARCH $60 Call UPL-CL @ $5.20
Insurance Put: Dec $45 Put UPL-XI (cancelled not triggered)
Entry $55 (11/02)
COP - $63.17 Conoco Phillips ** Stop Loss $57 **
Conoco is struggling to break the $65 resistance and the reason is probably the continued failure of the Belle Chase refinery on the Gulf. There is no start date and rumors are quoting something in the late first or early second quarter. This is going to be a very expensive problem for Conoco. I am sticking with it until the 200-day average breaks at $60 or January appears first.
ConocoPhillips is an integrated energy company. The Company's business is organized into six operating segments. The Exploration and Production segment primarily explores for, produces and markets crude oil, natural gas, and natural gas liquids on a worldwide basis. The Midstream segment gathers and processes natural gas produced by ConocoPhillips and others, and fractionates and markets natural gas liquids. The Refining and Marketing segment purchases, refines, markets and transports crude oil and petroleum products. The LUKOIL Investment segment consists of the Company's equity investment in LUKOIL, an international, integrated oil and gas company. The Chemicals segment manufactures and markets petrochemicals and plastics on a worldwide basis. The Emerging Businesses segment encompasses the development of new businesses, including new technologies related to natural gas conversion into clean fuels and related products, technology solutions, power generation and emerging technologies.
2007 $70 LEAP Call OJP-AN @ $6.40
Insurance Put: Cancelled - no entry
Entry $63.25 (10/31)
UNH - $63.71 Unitedhealth Group ** Stop Loss $61 **
Another new high for UNH and the streak continues. This is prime time for health care stocks and we should get one more push into year end with something over $65-$66 or maybe even $70 if the market really catches fire after the 19th. I will keep raising the stop just in case.
UnitedHealth is the leader in the managed heathcare sector. Earnings are soaring, +31% in Q3 to $2.43 billion and the outlook is only up. With health care costs rising more and more companies will turn to UNH to lessen their benefit expenses. We are also expecting a seasonal bounce now that October is behind us. There were two strong sell cycles in October as funds took profits from a long period of gains. Historically health care companies have done very well over the next three months as funds look for safe havens for year-end cash. UNH gained +37% from the October lows for the same period in 2004. Buyers appear on every dip to the 100-day average currently at $55.
UnitedHealth Group Incorporated is a diversified health and well-being company, serving approximately 55 million Americans. The Company provides individuals with access to healthcare services and resources through more than 460,000 physicians and other care providers, and 4,200 hospitals across the United States. It manages approximately $60 billion in aggregate annual healthcare spending on behalf of more than 250,000 employer-customers and the consumers it serves. The Company conducts its business primarily through four operating divisions: Uniprise, Health Care Services, Specialized Care Services and Ingenix. On July 29, 2004, the Health Care Services business segment acquired Oxford Health Plans, Inc. (Oxford). Oxford provides healthcare and benefit services for individuals and employers, principally in New York City, northern New Jersey and southern Connecticut.
2007 $60 LEAP Call VUH-AL @ $6.40
Insurance put: CANCELLED NO ENTRY