We are seeing the Japanese embark on QE1 Bernanke Style and this really is having the aftereffect of adding confidence any particular one of the world’s five largest economies can come out of its deflationary lull, a financial coma it has experienced for much too long.
Commodities are up across the board, and with gas prices rising in North America we see reason behind some of our plays to improve on that bullishness alone (although they are no more dry plays). The Utica has served us well through this volatility in the areas and a few names weren’ticed by us operating there in a material way hitting peaks (all-time, 52-week and some shorter-term time frames as well).
Commodity costs this morning are as follows:
The utility names continue to impress us with their energy and Friday’s treatment generated them dominating the all-time highs list. This chart is put by us together for visitors to take a peek at. Remember our previous remarks, if people continue to provide fresh capital into shares with yields and electricity use is increasing, both reveal to us a healthy economy and capital markets. Further reason to be high today.
Oil & Natural Gas
We’re really amazed at the power we’re viewing in Gulfport Energy (GPOR) shares today and the current cost action has only reinforced our belief that whilst the 52-week high reached Friday shows, weakness is to be obtained. We do not believe that strength is usually to be sold, however one could do just fine purchasing the weakness in order to offer to the strength to pocket a couple of details here and there. That’s perhaps not the overall game we wish to play because we believe this is one particular specific circumstances where a reasonable portion of capital being put to work here can turn into a small fortune. Already viewers have gained from a big increase with virtually every among our calls having doubled in price. Being bullish of most points Utica in 2013 could be the strategy to use, and it’s how exactly we have located the profile at this time.
It’ll be tough to not fall deeply in love with this investment after how well it has served us, but we’re seeking to get as near top dollar that you can. That will not be in 2013, but at some time later on in the next 2-5 years.
Friday saw two names in the natural gas space see reasonable price swings as natural gas prices have warmed up as merchants moved in to the space once more. Once again we are over the $4/MMbtu and that always appeals to the investors. As numerous times have been stated by us before, people are greater acquiring shares of the dry natural gas companies to take a position on the commodity than they are buying the natural gas ETF. That’s a fool’s game which can be best left to fools and their money. The 2 names which grabbed our consideration were Gastar Exploration (GST) and Exco Resources (XCO), both of which we’ve discussed before. If one desires to speculate these are two good names for short-term trading, but if one is looking for longer-term wondering we’d advise looking in to a number of the larger people with tougher balance sheets and better homes. This will get you more time, lower your danger of insolvency at the business but also lower your total increases as the increase will be less dramatic, but that is an industry we’re willing to make every time after the classes we learned early inside our job of being in the right place at the right time and lacking out because our companies did not have the staying power (seeing your assets improve others is quite frustrating for many who haven’t had the knowledge).
The Positions
We watched Friday as SandRidge Energy (SD) hit a fresh 52-week low before bouncing back again to finish the program at $4.96/share after increasing $0.14 (2.90%). Size was strong at 16.5 million shares and the $5/share level became opposition while the shares broke above the level briefly hitting the $5.03 level before retreating shortly after. Today should be interesting with how a markets are set up and if stocks cannot break above the $5/share level today, then your bears definitely have get a grip on of the one.
Which will be the same that may be said for Kodiak Oil & Gas (KOG), as bears have hammered the stocks decrease every single day this indicates. We genuinely believe that a down day here would definitely be bearish and would be some thing we find uncomfortable. As for which one we’d go bullish on at this time the answer seems very obvious to us, Kodiak could be the title, for we desire to be long ‘greasy’ and ‘liquidy’ companies and less therefore of those names which produce the dry stuff, of which SandRidge obviously will produce more and more of as their resources age. We think there is a bullish short term trade present in both names starting today, but could only check out Kodiak for a trade at the moment.
Because Bank of America (BAC) passed the Fed’s stress test recently, it has had its program of purchasing straight back shares to the tune of $5 billion permitted. The deal is completed, while I believe that the organization could have provided both a dividend increase plan as well as an extraordinary share repurchase plan and investors of BAC must decide whether to help keep holding the stock.
Last month I wrote this article in which I outlined my disappointment that BAC did not provide a plan to increase dividends:
The other day the Fed permitted the administrative centre ideas of a large proportion of the major banks, BAC involved. Consequently, BAC announced a really large share repurchase program of roughly $5 billion, and the redemption of $5.5 billion in preferred stock, in the months and quarters ahead. No timetable was seen by me for completion of the programs. This far exceeded the analysts’ estimates of a $1 billion plan, and Wall Street cheered the techniques with a 4% play the share price, up to about $12.60/share.
The article was met with very firm criticism concerning my opinion that BAC had “failed” its shareholders. While I might have been overzealous in defending my opinion, I also still believe that a complete part of dividend seeking people, who’ve held BAC shares wanting to be rewarded with returns, have been disappointed.
My Estimation Is The Same But Has Softened To A Qualification
The current share value for BAC of $11.97 reflects a fall of around 1 week in less than 3 months, while shares of numerous banks have dipped recently. I’ve not seen a plan for the share repurchase plan, but I’d say that the savings of 7% at today’s price could allow the business to either repurchase a bigger number of shares today, or also start taking care of supplying a more decent dividend, to directly compensate loyal shareholders.