Have a great and safe 4th of July and remember not to hold, light, and throw explosives unless that is your day job and then by all means, have at it!
Here's the weekly wrap along with the gas storage review since Thursday was a half day.
Holdings Watch: Closed Positions for the week ended 7/3/08.
- (HK) - Exited the July (HK) Calls for $4.00 (HKGJ), up 90% since entry on 6/30. Will be looking to add more longer dated calls on bouts of profit taking.
- (QBIK) - Sold the Cubic common share position for $4.89, up 64% since entry one month ago. I simply can’t come close to defending the price up here. I will revisit if it comes in some but the (CHK) well rate news was the driver I saw eventually moving it higher and we got that in spades on the JV call.
We spent the latter part of the week adding near and longer dated calls into sector weakness.
Holdings Watch For The Month of June:
On to the Wrap
ZComments:
1) Energy Sectors Sport Across The Board Decline. It's been a long time since I've had to write that. Blame sector rotation at the beginning of the new quarter, blame a shabby and teetering broad market, blame thin holiday volumes, or even the intra-day switch from extreme "buy, buy, buy" to "sell, sell, sell" on the gassy stocks by a media personality (from here on to be known as a Crameroo) for the dip. The reason behind the late week dip is probably a combination of all of the above. It certainly was not commodity related as they continued to advance to the bitter end.
So Where Does That Leave The Energy Sectors? In a nutshell, fine. Unless you are talking about the independent refiners in which that is an entirely different ball of black wax.
- From a valuation perspective: E&P and Service have never become expensive as a group. There are some names in the hotter plays like the Bakken and Haynesville where you could say (on a forward cash flow basis) that valuations have become stretched. These are not the names we generally traffic in.
