Tag Archive for COP

5 Oil Stocks for Covered Call Investing

January 16, 2012 Equities

While no environmentally inclined, liberty-loving American wants oil prices to skyrocket, we have to face facts and temper optimism with realism. If Iran closes the Straits of Hormuz, oil prices could jump sharply higher while easy money pressures the dollar against hard assets. Hedging against that risk doesn’t mean you should store gas in barrels in your yard or storage shed, locking in today’s relatively low prices. It means investors may want to increase their allocation to cheap oil and gas majors via bull calendar spreads or covered call option positions. Here are five rock solid oil companies to own over the long haul:

ConocoPhillips (COP) — ConocoPhillips has gone nowhere over the past six months, but high oil and gas prices should help the company’s growth rate over the next year. Conflicts with Iran, uncertainty over global oil and gas reserves, money printing by central banks, and overall poor resource management practices unfortunately benefit big oil prices. At 9X earnings and 8.5X forward earnings, ConocoPhillips looks cheap enough for the long term investor to buy and hold onto for years at a time. While the shale oil plays are enticing, the established oil majors are pretty cheap here. Reserve replacement is the biggest issue with these names, but we think new discoveries will be likely replenish reserves in time.

Statoil (STO) — Just because many Norwegian offshore oilfields are drying up, that does not mean Statoil Hydro is a broken company. Rather, it’s simply a broken stock, in my view. Statoil suffers from eurozone contagion more than future cash flow stream troubles. At 7.3x earnings and an EV/EBITDA of around 2.2X, Statoil’s investments across the globe should pay off for current shareholders in time. A 4% or so dividend never hurts, and risk averse investors should consider selling front month, at the money call options against their positions to collect income. People like to knock covered calls, but the numbers speak for themselves: Look at the performance of the CBOE buywrite S&P 500 (PBP) index versus owning the S&P completely unhedged over time and you see that returns are much better than the S&P when the market is flat or down.

 

Read More Here: http://seekingalpha.com/article/319780-options-plays-for-5-dirt-cheap-oil-stocks-that-most-investors-ignore

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Debt to GDP Ratios: What Does All of This Debt Mean?

December 10, 2011 Equities

In short, all of the developed world is awash in a never-ending sea of debt. What does all of this debt mean? Why are nations, individuals, and companies so highly leveraged? When will the great day of reckoning come for all of this debt?

There are clearly no easy answers, but a growing awareness of these issues have made many investors more aware of the safety and value of hard assets like gold, silver, farmland, and diamonds. While there is no gaurantee that hard assets will continue to rise in value, it is clear that many nations will continue to print money to pay off debt or at least the interest on their debts versus cutting expenditures.

As for the stock markets, we are seeing a clear Christmas rally but are struggling with the 200 day and 50 day MA’s — What I would do here is stay neutral until all of the moving averages are cleared to the upside at which point some traders may want to “rent” the market for a X Mas rally. Personally, I am more skeptical of the debt issues in Europe than most investors and think that risk management, a heavy cash weighting, and blue chips are the place to be…

Consider these stocks for the long run:

BRK-A

KO

JNJ

PEP

COP

CVX

STO

VALE

FCX

PBR

HES
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Also, consider selling covered call options against your long positions in these names… The added yield will compensate your conservative positioning in the marketplace.

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Eurocrats, Angle-a Jerkle, Jobless Claims, Oil, Etc…

September 29, 2011 www.hedgephone.com/network

Looks like the jobless claims are under 400K, the Eurocrats are going to move forward merging into the USA of Europe, and that oil stocks and oil prices in general are catching a bid this morning.

To be sure, there are many cheap stocks out there which you can buy… Some of them include SEB, VOXX, HES, COP, etc… Even Berkshire looks buyable…

Will keep you posted but remember this is career risk time into the end of the quarter so expect nothing but a VERTICAL tape… It’s all about keeping sheeple in the market.

Till next time

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Gap Down Now Filled, Sell all Long Positions in Stocks and Go Short Tech Stocks

September 27, 2011 Equities

You won’t hear that from CNBS… The gap from last week’s selloff is now filled and the ponzi uptick/fakeout/dead cat bounce is now over… You can try to catch the move to $1200 or you can do what I would do which is to short the QQQ or even better short AMZN, CRM, CMG, PANL, MAKO, etc… using options. Eventually these will go Netflix and implode. The question is when the banking cartel/banksters/Fed/Geethner will allow them to crash and plummet…

More to come… Also, Silver and Gold look buyable here as Gold simply retested the uptrend line which held. Stocks look bearish while commodities look tentitavely bullish so you can stay long a Rogers Raw Materials Fund, gold, silver, etc… and short stocks here for a longer term trade…

Commodity stocks look dirt cheap, especially VALE, COP, HES, NEM, PBR, CVX, STO, etc…

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Eurozone Debt and Banking Crisis — Bigger than You Think…

August 11, 2011 Equities

Every rally is a selling opportunity for the QQQ and the high valuation equities here, while MSFT, INTC, OSK, VALE, FCX, NWLI, ASI, KCLI, JNJ, COP, HES, etc… look undervalued here….

Be ready to sell rips and buy dips (AS ALWAYS) in the next few weeks… Keep in mind that the Europe problems are far worse than anyone can imagine.

Corruption and Lies are in a BULL MARKET!

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Overvalued Markets, Lack of QE, Flash Crashes, HFT’s Gone Mad, Too Much Margin Debt — Is Another 2008 Hitting Markets?

August 6, 2011 Equities

It appears another perfect storm is brewing in the equity markets, and until things calm down, I can’t recommend jumping back into stocks with both feet. While our picks from last week including NWLI, KCLI, ASI, KO, etc… held up quite well with some even gaining in the past week, the markets overall look too dangerous to make a short term play into an oversold market from the long side. To be sure, the market is incredibly oversold technically but the level of margin debt, the downgrade, and the many flash crashes that occurred on Thursday and Friday mean that investors should play defense first and offense second. The QQQ and IWM are still 30-50% overvalued here and while we are less net short than we were at the start of last week, we still view the market as being overvalued, risky, and filled with frauds. Many short candidates including CROX, HRBN, GMCR, PEET, DB, SPG, BXP, etc… will likely continue to sell off next week. For our part we will continue to do our best to “read the tape” and report back on what we see. In the after hours on Friday, the market sold off some .5% and that was before the downgrade news hit the wire.

Watch S&P 1186 or so for your support levels. Below that we likely have a good 10% to fall before we bottom out. The market was overvalued when Bernanke launched QE3 and the levels we saw last winter were simply outrageously overvalued. Many stocks do appear to be cheap here including COP, STO, CVX, HES, dNR, OSK, etc…. However, further downside could provide even better prices for most equities as correllations go to 1 and all stocks are sold off together regardless of earnings, cash flows, and balance sheets.

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