Current Watch List
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.
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: $100
Buy 2010 $120 LEAP Call YMO-AD
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: $80 *** New trigger ***
Buy 2009 $80 LEAP Call OLL-AB *** New Strike ***
FLS - Flowserve
Flowserve was downgraded last week by Robert Baird just as it hit a new high at $118. Their price target was $120 and he felt it was fairly valued. At the same time Flowserve was upgraded by S&P and Moody's. Flowserve is expected to earn just over $5 in 2008 and $10 by 2010. Even according to Baird this is not priced into the stock. I think they should be immune to any light market selling with support at $105 but could suffer in any real downdraft.
Flowserve Corporation (Flowserve) is a manufacturer and aftermarket service provider of flow control systems. The Company develops and manufactures precision-engineered flow control equipment, such as pumps, valves and seals, for critical service applications. Flowserve offers a range of aftermarket equipment services, such as installation, advanced diagnostics, repair and retrofitting. The Company sells its products and services to more than 10,000 companies, including engineering and construction firms, original equipment manufacturers (OEMs), distributors and end users. The Company operates through three business segments: Flowserve Pump Division (FPD) for engineered pumps, industrial pumps and related services; Flow Control Division (FCD) for engineered and industrial valves, control valves, actuators and controls and related services, and Flow Solutions Division (FSD) for precision mechanical seals and related products and services.
Breakdown trigger: $100
Buy Oct $110 Call FLS-JB
Breakout trigger: $110
Buy OCT $120 Call FLS-JD
UPL - Ultra Petroleum
This may seem like a strange play given my thoughts that gas prices could go down this summer. The reason UPL has been rising is the new cross country pipeline to their property in Utah. Once completed they will be able to sell their gas for more money with access to the eastern markets. Ultra is on a capex program to spend $755 million in 2008 to boost production by 18-22%. They pln to boost production another 25-30% in 2009 over 2008 levels. 2008 estimates are for 135-140 BCF. They produced 117 BCF in 2007. 2009 estimates are for 170-175 BCF. 2010 estimates are for 200-205 BCF. That would be nearly double their 2007 production.
Ultra Petroleum Corp. (Ultra) is an independent oil and gas company engaged in the development, production, operation, exploration and acquisition of oil and natural gas properties. The Companys operations are primarily in the Green River Basin of southwest Wyoming. The Company continually evaluates other opportunities for the acquisition, exploration and development of oil and natural gas properties. As of December 31, 2007, Ultra owns interests in approximately 121,652 gross (62,756 net) acres in Wyoming covering approximately 230 square miles. The Company owns an interest in approximately 676 gross producing wells in this area and is operator of approximately 50% of the 676 gross wells. The Company owns interests in 252,629 gross acres in Pennsylvania. On October 22, 2007, the Company sold Sino-American Energy Corporation (Sino-American), which owned its Bohai Bay assets in China.
Breakout trigger: $83
Buy 2009 $90 LEAP Call OZH-AR
Breakdown trigger: $76
Buy 2009 $85 LEAP Call OZH-AQ