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New Watch List Entries


PH - Parker Hannifin

NE - Noble Corp

BHP - BHP Billiton

FCX - Freeport McMoran Copper & Gold

RIG - Transocean Ltd

LVS - Las Vegas Sands

GNW - Genworth Financial

CENX - Century Aluminum

GLBL - Global Industries

LINTA - Liberty Media Corp


Current Watch List


NXY - Nexen

Nexen is a very well run exploration and production company and was recently rumored to be a takeover target of Total SA (TOT). That $19.7 billion bid never occurred and NXY dropped back to support last week. I believe that Total and others are waiting to see if oil prices fall further before making any bids. If oil prices drop they can buy assets cheaper. If oil prices rise their stock is worth more as a currency.

On Tuesday the 9th Nexen announced its budget for 2009 and expects more than $1 billion in free cash flow to add to their current $1.8 billion cash balance and use for share buybacks. They expect to spend $2.6 billion on oil and gas projects in 2009. They have another $2 billion in fully committed, undrawn credit.

This is a small but strong company with great prospects.

Company Info:

Nexen Inc. (Nexen) is an independent, Canadian-based, global energy company. Nexen operates in four segments: oil and gas, Syncrude, energy marketing and chemicals. The Company owns 7.23% of the Syncrude Joint Venture, which develops and produces synthetic crude oil from mining bitumen in the oil sands in northern Alberta. Energy marketing includes its crude oil, natural gas, natural gas liquids, ethanol and power marketing business in North America, Europe and Asia. Chemicals includes operations in North America and Brazil that manufacture, market and distribute sodium chlorate, caustic soda and chlorine through the Canexus Limited Partnership.

Breakdown trigger: $15

BUY 2010 $17.50 LEAP Call KJA-AW

Breakout trigger: (CANCELLED)


DRYS - DryShips

DRYS has been crushed by the 80% drop in cargo rates. This is only temporary. Once the recession runs its course the demand for products will again rocket higher. Currently $11 with a high of $116 back in July. Plenty of room to run.

Company Info:

DryShips Inc. (DryShips) is a holding company that, through its subsidiaries, is engaged in the ocean transportation services of drybulk cargoes worldwide through the ownership and operation of the drybulk carrier vessels. As of December 31, 2007, the Company owned and operated a fleet of 38 vessels and eight new buildings consisting of nine Capesize drybulk carriers (including four new building Capesize drybulk carriers), 33 Panamax drybulk carriers (including two new building Panamax drybulk carriers), two new building Kamsarmax drybulk carriers and two Supramax drybulk carriers. Its fleet carries a variety of drybulk commodities, including major bulks, such as coal, iron ore and grains, and minor bulks, such as bauxite, phosphate, fertilizers and steel products. In July 2008, the Company, through its subsidiary, Primelead Limited, acquired the remaining interest in Ocean Rig ASA. Primelead Limited is owner of 100% of the shares in Ocean Rig ASA.

Breakdown trigger: $8

BUY 2011 $12.50 LEAP Call ZDU-AV

The price of the 2010 $12.50 call was only 70 cents less.

OR

Buy the stock at $8.00


PH - Parker Hannifin

I believe the company should benefit from the Obama stimulus program. PH is attempting to breakout over resistance at $40.

Company Info:

Parker-Hannifin Corporation is a full-line diversified manufacturer of motion and control technologies and systems, including fluid power systems, electromechanical controls and related components. In addition to motion control products, the Company also produces fluid purification, fluid and fuel control, process instrumentation, air conditioning, refrigeration, electromagnetic shielding and thermal management products and systems. The Company’s manufacturing, service, distribution and administrative facilities are located in 40 states and in 47 foreign countries. Its motion control technology is used in the products of its three principal business segments: Industrial, Aerospace, and Climate & Industrial Controls. In November 2008, it acquired Aqua Pro, Inc. and Nexgen Hose Inc. In December 2008, the Company announced that it has acquired Detroit Plasticos e Metais S/A (Detroit) of Sao Paulo, Brazil, a manufacturer of fittings, valves, manifolds and thermoplastic tubing.

Breakout trigger: $42

BUY 2010 $50 LEAP Call LWU-AJ

Breakdown trigger: $37

BUY 2010 $50 LEAP Call LWU-AJ


BHP - BHP Billiton

BHP finally abandoned its acquisition attempt for Rio Tinto and the stock should trade on its own merits now. BHP is the world leader in mining with a strong component in oil and gold. When the inflation begins I expect BHP to explode.

Company Info:

BHP Billiton Limited is a diversified natural resources company. The Company has businesses producing alumina and aluminum, copper, energy (thermal) coal, iron ore, nickel, manganese, metallurgical coal, oil and gas and uranium, as well as gold, zinc, lead, silver and diamonds. The Company operates in nine customer sector groups (CSGs): petroleum, aluminum, base metals, diamonds and specialty products, stainless steel materials, iron ore; manganese, metallurgical coal, and energy coal. In July 2008, the Company completed the acquisition of Anglo Potash Ltd.

Breakdown trigger: $35

BUY 2010 $50 LEAP Call LPH-AJ


NE - Noble Corp

Noble is a great company that has been crushed and appears to be trying to make a bottom at $20. I am betting we will see that level break and get it slightly cheaper.

Company Info:

Noble Corporation (Noble) is engaged in contract drilling services worldwide. It performs contract drilling services with its fleet of 62 offshore drilling units located worldwide. This fleet consists of 13 semi-submersibles, three drillships, 43 jackups and three submersibles. The fleet count includes two F&G JU-2000E jackups and three deepwater dynamically positioned semisubmersibles under construction. As of December 31, 2007, approximately 85% of its fleet was deployed internationally. Its other operations include labor contract drilling services, and through November 2007, engineering and consulting services. Its operations are conducted principally in the Middle East, India, United States, Gulf of Mexico, Mexico, the North Sea, Brazil, West Africa and Canada. During the year ended December 31, 2007, Noble completed the rationalization of its technology services division with the sale of the rotary steerable system assets of its Noble Downhole Technology Ltd. subsidiary

Breakdown trigger: $18

BUY 2010 $25 LEAP Call YVJ-AU


FCX - Freeport McMoran Copper & Gold

The copper crash has crushed FCX but the world runs on copper. This is only a temporary setback. For two months FCX has held around support at $20 while we await the global rebound to begin.

Company Info:

Freeport-McMoran Copper & Gold Inc., through its wholly owned subsidiary, Phelps Dodge, and its majority-owned subsidiary, PT Freeport Indonesia, is a copper, gold and molybdenum mining company. In North America, the Company has six operating copper mines: Morenci, Bagdad, Sierrita and Safford in Arizona, and Chino and Tyrone in New Mexico, as well as one operating molybdenum mine: Henderson in Colorado. In South America, the Company has four operating copper mines: Cerro Verde in Peru, and Candelaria, Ojos del Salado and El Abra in Chile. The Company owns a 53.56% interest in Cerro Verde, an 80% interest in both Candelaria and Ojos del Salado and a 5% interest in El Abra. It owns 90.64% of PT Freeport Indonesia, including 9.36% owned through its wholly owned subsidiary, PT Indocopper Investama. The Company also operates Atlantic Copper S.A. (Atlantic Copper). Atlantic Copper’s operations involve the smelting and refining of copper concentrates.

Breakdown trigger: $18

BUY 2010 $25 LEAP Call YPX-AE


RIG - Transocean Ltd

This may be wishful thinking but RIG is getting pummeled as analysts predict the demise of offshore drilling. Nothing could be further from the truth but there will be a decline in day rates until oil prices firm. This could be an opportunity to buy RIG cheap during any January decline.

Company Info:

Transocean LTD. (Transocean), formerly Transocean Inc., is an international provider of offshore contract drilling services for oil and gas wells. As of February 20, 2008, the Company owned, had partial ownership interests in or operated 139 mobile offshore drilling units. Its fleet included 39 high-specification floaters (ultra-deepwater, deepwater and harsh environment semisubmersibles, and drillships), 29 midwater floaters, 10 high-specification jackups, 57 standard jackups and four other rigs. As of February 20, 2008, the Company also has eight ultra-deepwater floaters contracted for or under construction. The Company’s primary business is to contract these drilling rigs, related equipment and work crews primarily on a day rate basis to drill oil and gas wells. In November 2007, the Company completed its merger transaction with GlobalSantaFe Corporation (GlobalSantaFe).

Breakdown trigger: $30

BUY 2010 $40 LEAP Call WVX-AH


CENX - Century Aluminum

Aluminum is second only to copper as a recovery fuel and once the global reflation begins the aluminum stocks are going to be strong.

Company Info:

Century Aluminum Company (Century Aluminum) is a holding company engaged in producing aluminium. The Company’s principal subsidiaries are Century Aluminum of West Virginia, Inc. (Century of West Virginia), Berkeley Aluminum, Inc. (Berkeley), Century Kentucky, Inc. (Century Kentucky) and Nordural ehf (Nordural). Century of West Virginia operates a primary aluminium reduction facility in Ravenswood, West Virginia (Ravenswood). Berkeley holds a 49.7% interest in a partnership, which operates a primary aluminium reduction facility in Mt. Holly, South Carolina (Mt. Holly) and a 49.7% undivided interest in the property, plant, and equipment comprising Mt. Holly. The remaining interest in the partnership and the remaining undivided interest in Mt. Holly are owned by Alumax of South Carolina, Inc., a subsidiary of Alcoa (ASC).

Breakdown trigger: $7

BUY 2010 $10 LEAP Call WCM-AA

OR

BUY the stock at $7.00


AKS - AK Steel Holding

Copper, aluminum and finally steel are the three economic building blocks and AKS finishes our economic triple.

Company Info:

AK Steel Holding Corporation is a producer of flat-rolled carbon, stainless and electrical steels and tubular products through its wholly owned subsidiary, AK Steel Corporation (AK Steel and, together with AK Holding, the Company). The Company’s operations consist of seven steelmaking and finishing plants located in Indiana, Kentucky, Ohio and Pennsylvania that produce flat-rolled carbon steels, including coated, cold-rolled and hot-rolled products, and specialty stainless and electrical steels that are sold in slab, hot band, and sheet and strip form. The Company’s operations also include AK Tube LLC (AK Tube), which further finishes flat-rolled carbon and stainless steel at two tube plants located in Ohio and Indiana into welded steel tubing used in the automotive, large truck and construction markets. In addition, the Company’s operations include European trading companies that buy and sell steel and steel products and other materials.

Breakdown trigger: $6.50

BUY 2010 $10.00 LEAP Call YDF-AA

OR

BUY the stock at $6.50


LVS - Las Vegas Sands

Casino stocks have been crushed and especially LVS because of its Macao exposure. I believe this stock will recover and we will be well rewarded. I am recommending the stock instead of the option in order to avoid the time decay.

Company Info:

Las Vegas Sands Corp. (LVSC) owns and operates The Venetian Resort Hotel Casino (The Venetian), The Palazzo Resort Hotel Casino (The Palazzo), The Sands Expo and Convention Center (The Sands Expo Center) and The Congress Center in Las Vegas, Nevada, and the Sands Macao and The Venetian Macao Resort Hotel (The Venetian Macao) in Macao, China. It is also creating a development of integrated resort properties, anchored by The Venetian Macao, which the Company refers to as the Cotai Strip in Macao. In LVSC is developing Marina Bay Sands, an integrated resort in Singapore, and Sands Bethworks, an integrated resort in Bethlehem, Pennsylvania. It is also exploring other integrated resort opportunities in Asian and United States jurisdictions, and in Europe. The Company’s principal operating and developmental activities occur in three geographic areas: Las Vegas, Macao and Singapore.

Breakdown trigger: $5

BUY the STOCK at $5.00


LINTA - Liberty Media Corp

After rebounding off $2 back in November Liberty has been moving slowly higher despite the crappy market. Friday was near a six week high. If we get a sell off as we enter January I would like to buy this stock back in the $2.50 range.

Company Info:

Liberty Media Corporation is a holding company, which through its ownership of interests in subsidiaries and other companies, is primarily engaged in the video and on-line commerce, media, communications and entertainment industries. Through its subsidiaries, the Company operates in North America, Europe and Asia. Its principal businesses and assets include QVC, Inc. and Starz, LLC and interests in IAC/InterActiveCorp, Expedia, Inc. and The DIRECTV Group, Inc. In January 2008, the Company acquired controlling stake in Bodybuilding.com, a sports nutrition electronic retailer. Liberty Media’s interest in Bodybuilding.com will be attributed to the Liberty Interactive group. In August 2008, Celebrate Express, Inc. announced that it has completed the merger with a subsidiary of Liberty Media Corporation.

Breakdown trigger: $2.50

BUY the STOCK at $2.50


GNW - Genworth Financial

Do you really think a GE spin off is going to fail? This company will survive and it is too cheap to ignore.

Company Info:

Genworth Financial, Inc. (Genworth) is a financial security company dedicated to providing insurance, investment and financial solutions that help meet the homeownership, life security, wealth management and retirement security needs of more than 15 million customers, with a presence in more than 25 countries. As of December 31, 2007, the Company operated through three segments: Retirement and Protection, International and U.S. Mortgage Insurance. Retirement and Protection segment offers a variety of protection, wealth accumulation, retirement income and institutional products. Through the International segment the Company is a provider of mortgage insurance products in Canada, Australia, New Zealand, Mexico, Japan and multiple European countries. In the United States, the Company offers mortgage insurance products predominantly insuring prime-based, individually underwritten residential mortgage loans, also known as flow mortgage insurance.

Breakdown trigger: $2

BUY the STOCK at $2.00


GLBL - Global Industries

We played Global last year just as it rolled over at $25. The company is still growing and just won a $50 million deal to lay pipe for Petrobras. At $3 it is too good to pass up.

Company Info:

Global Industries, Ltd. provides worldwide construction and subsea services, including pipeline construction, platform installation and removal, project management, construction support, diving services, diverless intervention and marine support services to the offshore oil and gas industry primarily in selected international areas and the United States Gulf of Mexico. The Company provides services from shallow water to water depths of up to 10,000 feet. The Company’s business consists of two principal activities: Offshore Construction Services, which includes pipeline construction and platform installation, and removal services, and Subsea Services, which includes diving and diverless intervention, and marine support services. On December 31, 2007, the Company’s fleet included 14 major construction vessels (MCVs), three cargo launch barges and 10 dive support vessels (DSVs).

Breakdown trigger: $2.50

BUY the STOCK at $2.50


Dropped Watch List Entries


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