The Daily Kill Sheet Picking Off Profits One Stock At A Time!

September 18, 2013

Daily Kill Sheet For September 18,2013

Filed under: Advice,Copper/Gold Mining,Long,Take Profits — Administrator @ 10:46 am

I am closing out my 4/18 long call on Freeport McMoran Copper & Gold (FCX, $33.76) with a 22.9% gain.The May $24 puts that I recommended you sell expired worthless, thus we experienced a 5.4% return on that position as well.

The Daily Kill Sheet has not been updated for a while due to a death in the family. My wife had gotten sick earlier in the year which culminated  in her spending two weeks in intensive care in July, and her death in early August. Given the lack of activity on the blog, please consider all trades prior to March 2013 as closed. New trading ideas will be added regularly from here on out.

May 14, 2013

Daily Kill Sheet For May 14, 2013

Filed under: Advice,Consumer Discretionary,Take Profits — Administrator @ 8:46 am

I am taking profits on my 5/29/12 investment in  Sony Corp. (SNE, $21.61) with a 62.4% gain. The stock is up strongly this morning on news that Daniel Loeb has approached Sony with a letter stating that they should spin-off  part of its Entertainment Business to help raise capital to fix its ailing consumer electronics business. We bought the stock last year when it was trading at about 0.5x book value and my longer-term price target was $18 a share. The stock has easily surpassed that here and it’s time to take profit on the spike. While Loeb may want Sony to spinoff a piece of its business, there is no guarantee that Sony will listen to him. Thus, let’s take profits on the short-term spike.

April 18, 2013

Daily Kill Sheet For April 18, 2013

Filed under: Advice,Copper/Gold Mining,Long,Uncategorized — Administrator @ 9:37 am

Take a look at Freeport McMoran Copper & Gold (FCX, $27.48) for a trade. The company reported first-quarter earnings of $0.68 a share, well below last year’s $0.80 and the consensus estimate of $0.72. Even so, while the numbers weren’t great, the Street was expecting a miss so the news won’t likely come as a shock.

Meanwhile, there are two potential catalysts for the stock here. First, the stock is sitting just above an area of long-term support where the stock has typically stopped falling and has begun to rally. FCX stock is very volatile, and a change in momentum can lead to good gains. Indeed, take note of the recent small gap in the chart below. To fill the gap the stock would have to rise by over 17%. Meanwhile, the stock would have to rise by 35% just to retest its 200-month moving average at $37.81. Big upside from a stock sitting on solid long-term support always makes for a good speculation in my opinion.

Ok, so we have the technical set up, the question becomes “So what is going to send the shares higher from here?” In my mind the catalyst is a fix for the supply/demand imbalance caused by the slowing world economy. A recent mine collapse in the Western United States could be the trigger for that to happen. The Bingham Canyon Mine, recently had a land slide that effectively shut its production. The US is the world’s second largest copper producer and the Bingham Canyon Mine is responsible for about 14% of U.S. production. While the company does not expect any further slides, The department of Mine Safety and Health Administration has not approved the reopening of the mine yet. As of Saturday, there has only been limited activity at the mine…mainly workers removing overburden  from the southeastern portion of the mine (the slide happened in the northeastern wall. All said, while I do expect the mine to reopen in the next couple of weeks, it’s likely that production will be slow to return to normal, thus helping to reduce copper inventories in the near-term and slow to halt the slide in pricing.

Note that the mine collapse happened at a competitor’s mine, thus Freeport‘s production will not be hampered by the slide. The mine where the slide occurred also produced gold, thus the supply of new gold will also be hampered to some extent, also a positive for FCX. With that said, I think FCX shares are poised for a recovery here, driven by stabilizing commodity pricing and strong technical support near the current level. Any increase in the price of copper or gold should also help to boost the shares. My near-term price target for the stock is $32.50, implying an 18.2% gain to my target. My secondary target is $35 (slightly above the 200-day moving average) implying a 27.4% return to my secondary target. For those of you who believe FCX is a good value near the current quote, but doesn’t want the risk of owning the stock here, You can sell May $24 puts at $0.30. If the puts expire worthless in 29 days, you would garner a 5.4% return.


Click On The Graph for a larger Clearer Version.

April 17, 2013

Daily Kill Sheet For April 17, 2013

Filed under: Advice,Industrial,Industrials,Shorts,Take Profits — Administrator @ 10:09 am

I am closing out my short position in Cummins Inc. (CMI, $108.15) for a 6.3% gain. These shares are very volatile, and with the markets beginning to look near-term oversold I want to cover here and look for an entry point after a bounce.

April 16, 2013

Daily Kill Sheet For April 16, 2013

Filed under: Advice,Industrial,Industrials,Shorts,Take Profits — Administrator @ 8:15 am

I am taking profits on two of our short positions here after yesterday’s big decline. With that said, I am closing out our 1/31 short on Kennametal (KMT, $36.17) with a 12.5% gain. I am also closing out my 3/21 short on Parker Hannifin (PH, $85.96) with an 8.5% gain. Both stocks have had solid declines and are trading near our short-term price targets, thus I will take profits off the table here.

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