Author Topic: What are you buying today?  (Read 1270944 times)

tombgrt

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Re: What are you buying today?
« Reply #3740 on: April 26, 2019, 04:04:25 PM »
Bought a boatload of CRC LEAPS today. Painful to do but hopefully with a good return like last year. Basically crashed yesterday (and lost 10% days before) following a bill in California to restrict drilling, news that was already known on Tuesday. Purely sentimental selling if you ask me. Bill unlikely to go through. But even if it did, it would hardly be the end of CRC. Given that CRC is an option on brent prices already, you might as well leverage that leverage with options. Binary outcome most likely (either they survive and are a multibagger or they become a zero at some point) so much preferable about regular stock.

Would you mind sharing (even generally) the timeframe and strikes you're looking at here. I like this idea, but man some of those options are expensive. Be curious to hear how you're thinking about in the money/at the money/out of the money.

Yes, super expensive given volatility and nearly always are. :( But considering the leverage and upside potential it would be nuts if they were cheap obviously. When you know their net debt is around $5b vs market cap of $1b, you know the potential stock appreciation is huge. Consistent higher Brent prices simply balloon their CFs and reserves values and this is something the stock price will exponentially reflect.

Most are jan 2020 which of course are not technically LEAPS but should be more than long enough to capture a nice return. (If we don't see higher pricing in 2019, I'm not sure we would in 2020 either.) These 2019's I obviously sell first. Others are jan 2021. I've bought both ATM and OTM but generally prefer to buy them well OTM at strike $30-40 which is a realistic level as to not risk them expiring worthless and otherwise doesn't require a high cash outlay. These OTM options also actually act more as options of course vs deeply ITM options. ;) No use going for very high delta options for this stock anyway as the atraction to me is in the 'leverage times leverage component'. Also generally found tighter spreads in the OTM options, probably due to higher volumes. Sure, I could go for a call spread but I'm also fairly bullish on oil for the next 12 months so I'm not willing to bother.  :-X It's a highly speculative bet that paid off very well last year (various sold at 800%+ returns of those that I bought around a stock price of $15). You could say these options are now bought mainly with 'house money' as I can now buy these with last year's winnings. So obviously psychologically I'm more willing to swing for the fences. But to me it makes more sense than laying out a multiple of that capital to buy the stock itself.

Company looks cheaper today given current Buena Vista oil pricing, macro situation, extra JVs in place and small debt paydown they already had. They also have much less overhang from the hedges with more upside potential. + I don't see the bill getting far for a couple of reasons. CRC also has plenty of JV's with the state and they count on a great deal of tax revenue from them. Trump's administration was actually looking at expanding land permits for oil extraction so certainly some political headwinds on various levels of government as well. Not to mention gas prices would go ballistic if operations of CRC & co really got impacted in the next few years. Just some posturing by Newsom to please some of the voter base, IMO. So the sell off to me looks overdone and provided me with a decent opportunity to jump in. The announcement of more JVs could also be a great catalyst for the stock. Management is certainly making the right strategic steps. They simply got dealt a poor hand.

Hope this helps!
« Last Edit: April 26, 2019, 04:18:46 PM by tombgrt »


bizaro86

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Re: What are you buying today?
« Reply #3741 on: April 26, 2019, 05:29:45 PM »
Super helpful, thanks very much!

boilermaker75

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Re: What are you buying today?
« Reply #3742 on: April 30, 2019, 08:06:07 AM »
Wrote AMGN 170-strike, May 3rd expiration puts for $0.76 per share. Yes I know they report this evening.

boilermaker75

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Re: What are you buying today?
« Reply #3743 on: May 02, 2019, 11:03:21 AM »
Wrote AMGN 170-strike, May 3rd expiration puts for $0.76 per share. Yes I know they report this evening.

Wrote some 170-strike May 17 expiration puts.

Spekulatius

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Re: What are you buying today?
« Reply #3744 on: May 02, 2019, 12:27:48 PM »
Megacable MEGACPO.MX ( Mexican cable co.) and DWDP
« Last Edit: May 02, 2019, 12:30:33 PM by Spekulatius »
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cameronfen

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Re: What are you buying today?
« Reply #3745 on: May 02, 2019, 01:19:27 PM »
Megacable MEGACPO.MX ( Mexican cable co.) and DWDP

would you elaborate on MEGACPO?  going through CHTR and Liberty complex has me interested in cable cos esperially in emerging markets. 

Spekulatius

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Re: What are you buying today?
« Reply #3746 on: May 02, 2019, 02:53:05 PM »
Megacable MEGACPO.MX ( Mexican cable co.) and DWDP

would you elaborate on MEGACPO?  going through CHTR and Liberty complex has me interested in cable cos esperially in emerging markets.

The thesis is simple - this is like US cable 20 years ago. Its cheap (~7x trailing EBITDA ) and has a long  growth trajectory. Also interesting is that it has virtually no net leverage (cash is almost equal to debt). The stock was a bit depressed after the release of the Q1 report (increased churn diente bad economy in Mexico), somI took a plunge and bought some this AM at the open.
http://inversionistas.megacable.com.mx/en/reportes.php

There Isa los a VIC writeup on this stock a while back (2017.). Biggest risk is macro and currency, imo.
To be a realist, one has to believe in miracles.

sleepydragon

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Re: What are you buying today?
« Reply #3747 on: May 03, 2019, 09:30:58 AM »
Started a new position in GM today ( 1.5% of my portfolio)

John Hjorth

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Re: What are you buying today?
« Reply #3748 on: May 03, 2019, 12:37:31 PM »
Added today to BRK.B [partially with proceeds from NVO, ref. this post], BAM & SCHO.CPH.
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boilermaker75

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Re: What are you buying today?
« Reply #3749 on: May 03, 2019, 07:10:52 PM »
I wrote some WFC 48-strike May 17 puts.