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In Play Updates and Reviews

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HOS - $41.05 +1.46 - Hornbeck Offshore Services

Breakout to a new high on Friday and nice rebound off the oil dip lows on Tuesday. There was no news for the week.

For initial commentary see June 10th newsletter

Breakdown trigger: $39.00 hit 6/08

Position: 2009 $40 LEAP Call ZIG-AH @ $8.00


HDY - $3.00 - +0.01 Hyperdynamics Corp

Hyperdynamics continues to consolidate after the prior week's gains. HDY met with the Prime Minister of Guinea in Washington to discuss continued investment in Guinea by HDY. The Prime Minister also met with Condoleezza Rice to seek U.S. financial aid for Guinea. A film crew filmed the meetings and they were shown on Guinea TV. The National Assembly is going to ratify the HDY contract for revenue sharing before the current special session closes. This contract when ratified will become a "Project of Law" or super contract that cannot in normal circumstances be broken. Once the contract is ratified HDY will begin a rapid development phase on its 31,000 square mile lease.

Once the contract is ratified I doubt we will see $3 again. Last chance!

For initial commentary see June 3rd newsletter.

Position: HDY stock @ $2.44


TSO - $62.76 +3.56 - Tesoro

TSO rebounded nicely to close near its all time high on Friday. TSO senior VP Lynn Westfall, said the problems with refiners in 2007 stems from low emission rules that went into effect in 2006 as well as the switch over from MTBE to ethanol. Massive changes were needed to accomplish these changes in 2006 and routine maintenance was delayed. Now they are paying the price in lack of downtime for maintenance, aging parts and a shortage of skilled labor. Don't expect any large improvement in output any time soon.

No change in play.

For initial commentary see April 29th newsletter.

Earnings: May 3rd, $1.67 vs 61 cents in comparison qtr

Breakout target: $55 hit 10:AM on 4/23/07

Position: 2009 $120 LEAP Call ZGC-AD @ $16.68
Post split: (2) 2009 $60 LEAP Calls ZGC-AL @ $8.34


ATW $67.78 +3.40 - Atwood Oceanics

Atwood broke out to a new high on Friday on no news. No change in play.

Interesting article in Investors Business Daily regarding Atwood.

For initial commentary see April 29th newsletter.

Earnings: May 8th est $1.08, actual $1.01

Breakout trigger $60.50 hit 4/23/07
Position: 2009 $70 LEAP Call ZFJ-AN @ $6.50


BHP - $57.87 +2.09 - BHP Billiton

BHP is going vertical on strength in metals, uranium and oil, all of which BHP produces. The China speculation mentioned below is not hurting either. There was no additional news.

Prior commentary:

BHP continues to rise on speculation that China could be eying a takeout of BHP to help fuel their metal needs. China recently formed a $237 billion investment company and BHP is thought to be a target of that investment. China has a history of buying commodity assets to prevent other countries from having access. China is consuming large amounts of metals and ores and taking BHP's assets off the market would be a major achievment for China and a serious problem for the rest of the world. BHP has mining assets in everything from coal, uranium, various metals and oil. With a marker cap of $163 billion it would be a big bite for China but entirely doable.

No earnings date announced.

For initial commentary see March 17th newsletter.

Earnings schedule: No date announced.

Breakout target $43.50 hit March 12th

Position: JAN-09 $50 LEAP Call ZPK-AJ @ $6.00


CCJ - $55.60 +3.60 - Cameco

CCJ spiked to a new high after French owned Areva announced it was buying uranium miner UraMin for $2.5 billion to give Areva another 700 tons of production per year and access to exploration projects in South Africa, Namibia and the Central African Republic. Uranium prices are expected to hit $200 a pound by 2010. They are currently $135 per pound. Current UraMin production is worth about $300 million a year but the deposits in the ground are worth far more than that.

In April Cameco projected sales would be 50% higher in 2007.

Worldwide there are 24 new reactors being built, 41 on the drawing boards and 113 in the proposal stages. If all were built it would be a 50% increase from the 435 reactors now in operation. In 2006 the world consumed 180 million pounds of uranium but produced only 103 million pounds. The rest came from Russian nuclear warheads being decommissioned. The supply from those warheads is dwindling and will be completely gone by 2015.

For initial commentary see March 10th newsletter.

Earnings: Apr-27th, -47% due to revenue timing

Breakout trigger: $37.50 Hit March 7th

Position: JAN-09 $40 LEAP Call ZBK-AH @ $7.80


PTR - $139.65 +4.99 - Petrochina

PTR is rocking and showing zero weakness. The news that Berkshie Hathaway shareholders voted 53:1 against a proposal to sell Berkshire's $3.3 billion investment in PTR was the get out of jail free card. PTR has rocketed off now that it is free of a pending multibillion sale. Announcing multiple oil discoveries over the last month did not hurt either. No change in play.

For initial commentary see March 10th newsletter.

Breakdown target:
$110 1/2 position - hit Mar-5th

Position: JAN-09 $120 LEAP Call ZJK-AD @ $10.70
Cost reduction 4/19 $10.70 -2.25 = $8.45

Cost reduction play:
Position: stopped @ $114 4/19
Short June $105 Put PTR-RA @ $3.40, exit $1.15. +2.25


CHK $37.32 +1.74 - Chesapeake Energy ** Stop loss $33.50 **

CHK rocketed to a new high after a peaceful shareholder meeting where it outlined plans to grow its net asset value by 25% per year. CHK is now the nations 6th largest gas producer and 96th in profit generation of the Fortune 500. No change in play.

For initial commentary see Dec-9th newsletter.

Earnings: May 4th, 87 cents vs est of 78 cents

Current recommendation: Hold

Position: 2009 $35 LEAP VEC-AG @ $5.30

Insurance put:
Oct $30 Put CHK-VF @ 90 cents. Profit stop $28


MRO $132.51 +7.06 - Marathon Oil

Consolidation, what consolidation? MRO blasted off to a +7 point gain for the week and another new high after announcing its profits were up +72.6% from the prior year placing it 23rd on the Fortune 500. No other news.

Don't forget the 2:1 split coming Monday.

No change in play.

For initial commentary see Nov-18th newsletter.

Earnings: May 1st, $2.04 vs est $1.93

2:1 Stock Split June 18th, record date May 23rd

Current recommendation: Hold

Position 2009 $100 LEAP Call VXM-AT @ $12.60
Cost update: Expired March put +65 cents to $13.25

Insurance put: 2/18/07
Position: March $85 PUT MRO-OQ @ 65 cents. expired


HES - $61.00 +1.93 - Hess Corporation *** Stop Loss $57 ***
(Formerly (AHC))

Finally a rebound for Hess. After slipping dangerously close to the stop at $57 the late week rebound pushed it back to $61 and only about 50 cents away from its historic high. No news.

Maintain the stop at $57 just in case.

For initial commentary see Nov-4th newsletter.

Earnings: Apr-25th, $1.17 vs $2.22

Current recommendation: Hold

11/05/06 2009 $50 LEAP Call VHS-AJ @ $6.80
Cost adjustment put exit +1.60, cost = $8.40
Cost adjustment May puts +2.15, cost = $10.55

Insurance Put: Triggered Jan-3rd @ $49
01/03/07 May $45 put HES-QI @ $2.60, exit 1/26 $1.00

Insurance Put: 2/26/07
MAY $50 PUT IGG-QJ @ $1.35 expired
May $55 Put IGG-QK @ $.80 expired


BTU - $52.29 +.81 - Peabody Energy

BTU is struggling after recent energy hearings repeated the claim almost daily that coal-to-liquids technology produces twice the greenhouse gases as regular gasoline/diesel refining and consumption. We already knew it was a lot and emissions controls were the reason this technology is not more popular. Evidently mainstream America was unaware. No change in play.

For initial commentary see Oct-22nd newsletter.

Earnings schedule: April 19th, -32% on special items

Current recommendation: Buy at $46.50

10/22/06 Jan-2009 $50 LEAP Call ZZT-AJ @ $8.70
02/05/07 March put stopped -$1.00, cost = $9.70

Insurance put: Triggered with drop through $39
01/03/07 March $35 Put BTU-OG at $1.15, stopped @ $42.50


SLB $84.60 +5.84 Schlumberger *** Stop Loss $77 ***

SLB spiked higher on news it was going to be added to the Russell 3000 index. SLB is incorporated overseas and as such not eligible for inclusion into the indexes. Russell has changed the rules and 84 previously ineligible companies are being added. I will take the gains regardless of the reason. No change in play.

For initial commentary see Oct-14th newsletter

Earnings: April 20th, 96 cents vs est of 91 cents

Current recommendation: Buy at $60, stop at $55

LEAP Position:
1/2 9/11/06 @ $8.60
1/2 9/12/06 @ $8.00
Position: 2009 $70 LEAP Call VWY-AN @ $8.30
Cost update for expired Jan put +2.00 = $10.30
Cost update for expired June put +1.15 = $11.45

Insurance Put: 9/18
Position: Jan $50 Put SLB-MJ @ $2.00, expired

Insurance put:
Position: June $70 PUT SLB-RN @ $1.15, expired


SUN $84.92 +5.30 - Sunoco *** Stop Loss $76 ***

Sunoco powered to a new high on Friday erasing completely the -$7 drop from the prior week. No news just strong refining margins.
Maintain the stop at $76.

For initial commentary see Oct-14th newsletter

Earnings: May 3rd, 70 cents vs 59 cents in comparison qtr

Current recommendation: Buy at $60, stop at $54

LEAP Position:
9/12/06 Position: 2009 $70 LEAP Call VUN-AN @ $13.50
Cost update expired Jan put +2.40 = $15.90
Cost update expired June put +0.85 = $16.75

Insurance Put:
Position: Jan $55 Put SUN-MK @ $2.40, expired

Insurance put:
Position: June $70 PUT SUN-RN @ 85 cents, expired.

Non-Energy Positions

TEX - $84.90 +2.73 Terex Corp *** Stop Loss $80.00 ***

TEX rose out of danger after missing our stop by a mere 11 cents the prior week. Goldman and Merrill lifted estimates and reiterated buys on several stocks in the sector. No other news.

For initial commentary see May-13th newsletter

Breakout target $81.00 Hit 5/07

Position: Jan-09 $90 LEAP Call VXQ-AR @ $16.40


ATI - $110.20 -1.46 - Allegheny Tech

ATI was crushed when Nucor warned that profits could fall. The entire sector fell despite strong titanium orders and backlogs at ATI.

Fortunately this is a long-term directional spread and our short call will decline faster than the long call. No change in play.

For initial commentary see May-5th newsletter

Breakdown target $110.00 hit 04/30

Call spread:
LONG JAN-09 $110 LEAP Call OYG-AX @ $21.50 (now 26.50)
SHORT JAN-09 $140 LEAP Call ZKG-AH @ $9.50 (now 12.10)


BZH - $31.78 -0.71 - Beazer Homes *** STOP LOSS $36.50 ***

Two weekly declines in a row, maybe our luck is changing. The next hurdle will be the new residential construction numbers on Tuesday.

Beazer has several suits pending, some seeking class action status on charges it practiced predatory lending, filed illegal loan documents and manipulated its stock price.

For initial commentary see March-31st newsletter

Earnings: April 26th, -1.12 vs +2.35 in the comparison quarter.

Position: Jan-08 $25 PUT WZF-ME @ $3.10

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