What are you buying today?

[nwoodman]

KMX, OXY

[no_free_lunch]

Small position in RCH.TO

[lnofeisone]

On 4/22/2022 at 4:23 PM, LC said:

 

I joined the party as well. Hopefully the kool aid is light and sweet.

Strong earnings are coming from most O&G (not RRC that is hedged so low). CVE just tripped its dividend on top of a massive quarter (and that included a huge hedge loss). VET has additional strength coming from Russia acting belligerent and stopping gas flows to EU now. 

 

@Castanza - O&G makes me nervous too. I want to say that this time is different as there is discipline in the sector (debt reduction across the board) and OPEC isn't flooding the markets but I'm reading all I can for any signs of exuberance.

[lnofeisone]

Quick "cash substitute idea" - buy ET at $11.40 this AM and sell 2024 10 calls at $2. ET is going ex-div on May 6th so odds are your shares will be called. You'll get 5% for holding this thing for about a week. 

[Saluki]

Added some FB and ATCO.  I'm fully invested but I may sell some HHC today and add to ATEX and MU on their pullback. GOOG is starting to look cheap again (~20P/E), but I think if tech companies are getting dinged, they may spend less on ads, so maybe FB and GOOG are priced correctly.  

[Spekulatius]

3 hours ago, lnofeisone said:

Quick "cash substitute idea" - buy ET at $11.40 this AM and sell 2024 10 calls at $2. ET is going ex-div on May 6th so odds are your shares will be called. You'll get 5% for holding this thing for about a week. 

You also get a K-1.

[lnofeisone]

12 minutes ago, Spekulatius said:

You also get a K-1.

Correct. I should have mentioned that as it may impact some on the board. Otherwise, if ET gets called away before the distribution ex-date, the K-1 is largely meaningless. 

[aws]

3 hours ago, lnofeisone said:

Quick "cash substitute idea" - buy ET at $11.40 this AM and sell 2024 10 calls at $2. ET is going ex-div on May 6th so odds are your shares will be called. You'll get 5% for holding this thing for about a week. 

 

Why do you think the call holders would exercise early? It looks like the dividend is only 0.20, which is much less than the implied value of the call option. Options are only exercised early when the time value of the option is less than the dividend being paid.

[lnofeisone]

@aws ET reports on the 4th so I expect IV to collapse. My guess it will be enough to to have ET called away.

[aws]

I think you're overestimating IV contraction after earnings. Those calls have 6 more quarterly earnings reports after this one before they expire, so it is unlikely that all IV goes away after one. It might be a fine play as the short calls will basically double your dividend over the life of the option, but I wouldn't expect to get called away anytime soon.

[gfp]

So we have two "cheap" stocks trading near their 52 week lows reporting earnings tomorrow before the bell - BC and ABG.  Both are likely to report a good quarter, ABG is likely to raise guidance.  Will be interesting to see market reaction.

[Agrippa07]

added to SPOT (small position) and FB (almost fully invested now)

[fareastwarriors]

More PCYO and some CKX

 

 

[Castanza]

smidge of BC and PCYO

[boilermaker75]

3 hours ago, gfp said:

So we have two "cheap" stocks trading near their 52 week lows reporting earnings tomorrow before the bell - BC and ABG.  Both are likely to report a good quarter, ABG is likely to raise guidance.  Will be interesting to see market reaction.

 

I'm thinking about writing the May 20, 65-strike puts on BC. Nice return and margin of safety.

[CorpRaider]

More SMG

[gfp]

36 minutes ago, boilermaker75 said:

 

I'm thinking about writing the May 20, 65-strike puts on BC. Nice return and margin of safety.

 

Well I imagine the prices and volatility will change by the time the options market opens post-earnings tomorrow but who knows

[boilermaker75]

4 hours ago, gfp said:

 

Well I imagine the prices and volatility will change by the time the options market opens post-earnings tomorrow but who knows

 

My error, I misread and thought earnings were after market tomorrow. Probably missed it then.

[Gregmal]

Swing some ALCO into more AIV and VRE

[aws]

On 4/26/2022 at 3:11 PM, aws said:

UNTCW - $63.74 strike warrants expiring in 5 years on a stock trading at $58. Black-Scholes should price this in the $20s I would think, but they are trading for $6 on the high side down to a penny on the low side. I think they just became tradable today after a two year long bankruptcy and people are just taking what they can get for them.

 

Well this worked out spectacularly. No change in the underlying share price, but the warrants have repriced up toward what would be reasonable. I actually was able to buy some of these for as little as 8 cents each, and two days later they at $13.25.

[lnofeisone]

30 minutes ago, aws said:

 

Well this worked out spectacularly. No change in the underlying share price, but the warrants have repriced up toward what would be reasonable. I actually was able to buy some of these for as little as 8 cents each, and two days later they at $13.25.

Awesome trade. Well done!

[hasilp89]

7 hours ago, aws said:

 

Well this worked out spectacularly. No change in the underlying share price, but the warrants have repriced up toward what would be reasonable. I actually was able to buy some of these for as little as 8 cents each, and two days later they at $13.25.

Curious how you came across this? (And well done)

Edited April 29, 2022 by hasilp89

[aws]

3 hours ago, hasilp89 said:

Curious how you came across this? (And well done)

I was involved with the stock and its bonds before the bankruptcy and have followed the process. The shares were listed last January but the warrants kept getting delayed. The warrants would have been nearly worthless if they came public at the same time as the shares because the strike price so high. The shares traded around $7 when they went public, about 90% haircut for the bondholders, and the warrants were structured that they wouldn't be in the money until the bondholders were made whole.

 

But a lot has changed for energy stocks in the past 15 months, and now the stock was trading at nearly the same strike price as the warrants. I was quite interested to see what the warrants would trade at under the circumstances, thinking they might trade a few dollars under fair value. And to my surprise they came public at 1 penny per warrant. So it didn't matter what fair value was, I just stuck bids out there and some people sold to me at pennies on the dollar. It took a couple of days before price discovery took place, and I was able to vacuum up a big chunk of the warrants.

[Castanza]

CLF, X

 

X  P/E 2.14

 

Anyone else looking at this? Net debt down to 1.1b from 2.9 over last 5Q. So another 3Q before debt is gone we could see increased capital return. Share repurchase 123m with 500m still available. 

[fareastwarriors]

Some BRK.B to celebrate the old guys.

enjoy the meeting!