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Dropped Entries

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New Watch List Entries
MDR McDermott Intl
GRMN Garmin
SPWR SunPower
CY Cypress Semi
TOL Toll Brothers
PBR Petrobras
USO U.S. Oil Fund

Current Watch List

MDR - McDermott Intl

On McDermott's conference call they said they were expecting to announce "several" $1 billion contracts over the next 90 days and a "lot" or $100-$300 million awards. This is the most in the company's history. They already have a $9.8 billion backlog.

Company Info

McDermott International, Inc. is an engineering and construction company with specialty manufacturing and service capabilities and is the parent company of the McDermott group of companies, including J. Ray McDermott, S.A. (JRMSA) and The Babcock & Wilcox Company (B&W). The Company operates in three business segments: Offshore Oil and Gas Construction, Government Operations and Power Generation Systems. On July 27, 2007, the Company acquired Secunda International Limited. On May 1, 2007, it acquired Marine Mechanical Corporation.

Breakdown trigger: $46.00

Buy 2010 $50 LEAP Call YAE-AJ
Sell 2010 $65 LEAP Call YAE-AM

Breakout trigger: $51.00

Buy 2009 $55 LEAP Call OYZ-AK
Sell 2009 $75 LEAP Call OYZ-AO

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GRMN - Garmin

I believe the worst is over for Garmin and I am a firm believer in their products having driven over 20,000 miles on a NUVI 660. They appear to be trying to rebound out of their disaster and over $63 could gain some traction.

Company Info:

Garmin Limited (Garmin) is a global provider of navigation, communications and information devices, which are enabled by global positioning system (GPS) technology. Garmin designs, develops, manufactures and markets a family of hand-held, portable and fixed-mount GPS-enabled products and other navigation, communications and information products for the automotive/mobile, outdoor/fitness, marine and general aviation markets. The segments of the Company are Marine, Automotive/Mobile, Outdoor/Fitness, and Aviation. In January 2007, Garmin acquired location-based services provider Digital Cyclone Inc. (DCI). DCI markets location-based services, including weather solutions for consumers, outdoor enthusiasts, and pilots on a subscription- based model in partnership with national wireless carriers and regional carriers

Breakout trigger $63.00

Buy 2009 $70 LEAP Call VWM-AN
Sell 2009 $100 LEAP Call VWM-AT

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SPWR - SunPower

Is the worst over in the solar sector? Nobody knows but SPWR has been trying to bottom at $60 since mid-January. If it ever catches fire again it could be a fast ramp. Every day brings us closer to a solar revolution and SPWR is leading their portion of the sector. If we do get a bounce over initial resistance we will enter a speculative call spread to reduce our cost.

Company Info:

SunPower Corporation (SunPower) is a vertically integrated solar products and services company that designs, manufactures and markets high-performance solar electric power technologies. Its solar power products are sold through its components business segment, or its components segment. In January 2007, it acquired PowerLight Corporation PowerLight, known as SunPower Corporation, Systems (SP Systems), which developed, engineered, manufactured and delivered large-scale solar power systems. These activities are performed by its systems business segment, or its systems segment. Its solar power systems, which generate electric energy, integrate solar cells and panels manufactured by it, as well as other suppliers. It operates in two segments: components segment and Systems segments.

Breakout trigger: $66

Buy 2010 $80 LEAP Call LMO-AP
Sell 2010 $130 LEAP Call LMO-AW

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CY - Cypress Semi

Cypress is another way to play the solar sector. They are a major owner of SPWR and will likely sell off their ownership of SPWR in 2008 according to analysts. The value of their SPWR holdings is more than the entire market cap of Cypress.

The volatility is much lower on Cypress than SunPower and those looking for a safer play should consider this position instead of SPWR.

Company Info:

Cypress Semiconductor Corporation (Cypress) is a broad-line semiconductor company. The Company delivers mixed-signal, programmable solutions. Its offerings include the Programmable System-on-Chip (PSoC) products, universal serial bus (USB) controllers, general-purpose programmable clocks and memories. Cypress also offers wired and wireless connectivity solutions. Cypress serves numerous markets, including consumer, computation, data communications, automotive and industrial. As of December 30, 2007, Cypress operated five business segments: Consumer and Computation Division, Data Communications Division, Memory and Imaging Division, SunPower Corporation (SunPower) and Other. During the fiscal year ended December 30, 2007 (fiscal 2007), SunPower completed the acquisition of PowerLight Corporation (PowerLight), known as SunPower Corporation, Systems.

Breakout trigger: $21.50

Buy 2010 $25 LEAP Call WSY-AE

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TOL - Toll Brothers

Last week's Fed action has built a fire under the homebuilders. The capital changes on FNM/FRE could add $200 billion to the mortgage market and if they follow through with plans to raise additional capital and buy mortgage backed securities that number could rise to $1 trillion. That should be enough to keep that fire going. CEO Robert Toll bought 250,000 shares on March 12th.

Company Info:

Toll Brothers, Inc. is engaged in designing, building, marketing and arranging finance for single-family detached and attached homes in luxury residential communities. The Company is also involved, directly and through joint ventures, in projects where it is building, or converting existing rental apartment buildings into high-, mid- and low-rise luxury homes. During the fiscal year ended October 31, 2007 (fiscal 2007), the Company delivered 7,023 homes from 385 communities. In fiscal 2007, the Company has introduced 70 new single-family detached models, 28 new single-family attached models and 32 new condominium units. The four segments operated by the Company includes the North, the Mid-Atlantic, the South and the West.

Breakout trigger: $25

Buy 2010 $30 LEAP Call YKW-AE

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PBR - Petrobras

This company has everything going for it and there is no reason for this decline other than sector rotation. If we see $90 on a dip we need to be buyers.

Company Info:

Petroleo Brasileiro SA - Petrobras (Petrobras) is a Brazil-based holding company engaged in the exploration, production, refinement and distribution of oil and gas. The Company is involved in four business areas: Exploration and Production, Downstream, Gas & Energy and International. Petrobras has 109 production platforms and 15 refineries. It operates 31,089 kilometers of pipelines. The Company has various subsidiaries: Petrobras Quimica SA - Petroquisa, which is engaged in the production, commercialization, distribution, import and export of chemical products; Petrobras Distribuidora SA - BR, which is involved in the distribution and commercialization of oil products and natural gas, and Petrobras Netherlands BV - PNBV, which is active in the purchase, sale and rent of equipment and platforms for the production of oil and gas. Petrobras operates in Brazil, Argentina, Mexico, Portugal, the United States, Peru and Turkey, among others.

Breakdown trigger: $90

Buy 2010 $100 LEAP Call YMO-AT
Sell 2010 $140 LEAP Call YMO-AH

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USO - U.S. Oil Fund

The USO fell -$8 last week to trade under $80. If we really get some margin selling in the commodities and especially oil it is possible but not probable we could see $72. If by some freak combination of circumstances we do tag that level we want to be long.

Breakdown trigger: $72

Buy 2009 $75 LEAP Call OLL-AW
Sell 2009 $95 LEAP Call OLL-AQ
 

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