Category Archives: $BP

2CentView Sector Views…

At the beginning of each new year, take a look at your portfolio allocation across different sectors, for which there should be at least 5.

Be Overweight in sectors you think will be do well – up to a maximum of 35% in one sector.

2CentView is overweight in Tech and Financials and underweight in commodity/oil.

This view is unchanged, with core positions in TECH: $FB and $GOOG, $SPWR (Sun Power – solar), $SWKS (Sky works) and $NFLX (Netflix), AND Financials: $MS, $HSBC and $DLG.

Tech will continue to drive costs lower via the cloud and shape the we work and play.

Biotech is also making beakthroughs,  but risky.  2CentView has a core position in $CELG (Celgene) – if  there is a cure for cancer,  there is a good chance CELGENE would be involved.

Financials should do well when rates go higher and economies recover, which the UK and the US are on course.

Top Picks: $MS (Morgan Stanley) 32 vs. FV=$40, Yield 1.7%: Stock was hit hard on last earnings as Fixed Income still shows volatility in earnings. $MS Have addressed this by cutting the department and focus on equity underwriting and wealth management.

$HSBC – 537 vs 620 Yield, 6%. Gulliver is determined to cut down the size of the business and improve return on capital. You are paid a nice 6% dividend while you wait for his turnaround plan to take shape.

Sectors to keep an eye on are Energy and Commodity – but is still perhaps too early. Credit default Swaps are very wide and Earnings too unpredictable and the winter is SO WARM!

Keep plugged into 2CentView to get idea updates in these sectors.

If you want to buy now, 2CentView top pick is $BP , 354 vs 400 FV, Yield 5.5%, solid balance sheet, and can withstand low prices.

Finally always keep a look out for recovery plays – QUALITY companies which have been beaten down but can recover – Rolls Royce (FV=550), G4S (FV=300 vs 225), VRX (FV=185 vs 102).

 

 

Market sell off Savage – quality stocks at lower prices…UPDATE…

Revisiting some the quality stocks tweeted out at the end of August, following a savage sell off.The market is punishing stocks whose guidance is weak – $SAVE, $GPRO and NXPI…but have rewarded big cap tech stocks like $GOOG, $MSFT.
Can FaceBook join the big tech party or will it sell off following its big run this month?

Here is an update on these great companies mentioned on August 23rd:

Biotech:
$GILD (Gilead) FV = 115 vs 109 – hold out for 115.

Financials:
$MS (Morgan Stanley) FV= 39 vs 34 1.75% 14% Cheap
Reported a terrible quarter, but hold  –  stock is back to 33.4 wait another quarter!

$JPM (JP Morgan) FV=72 vs 64 2.77% 12% Cheap
Prospect for lower rates for longer has not hurt the stock – HOLD.

$HSBC (HSBC) FV=625 vs 533 5.9% 18% Cheap
Weak earnings in Barclays and a potential cash call in Standard Chartered, has not hurt the stock that much at 510. Keep a stop of 470.

Social Media/Internet Retail
$FB FaceBook – look to buy around $80 (30% 5Y Growth)
Results next week – if you got in the low 80’s take profit. 2Centview sold some of the core at 104.

$AAPL (Apple) FV = 120 vs 105
Take profit some profit here above 120.

$TWTR (Twitter) FV=28 vs 26
Terrible quarter – but stock holding up – FV Much lower as company lowers growth expectations. Exit for flat or hold if you believe in Dorsey.

$YHOO (Yahoo FV = 36 vs 33 (vs 68.2 in BABA stock)
Take profit above 36.

$BABA FV= 88 vs 68
Take some profit here at 84.

Chips
$SWKS (Skyworks) FV=92 vs 79 14% Cheap
Stock lower following NXPI results – but FV Unchanged. HOLD.

3D Printing
$HPQ (hewlett packard) FV= 36 vs 27.5 2.56% Yield – Separation could add $5 – look at EBAY/Paypal!
HOLD. FV Unchanged.

$SSYS (stratasys) FV = 25 (if you include $6 of cash) vs 28
FV lower. Exit here at $26 unless you believe 3D printing is potential growth story.

Solar
$SPWR FV=26 vs 21.7
Take some profit here at $26. Keep a core if you believe in Solar Power long term.

Oil
$BP FV=470 vs 357 yield 6.8%
FV= 400 now – lower as oil prices expect to stay lower for longer. Hold for the YIELD or take profit if you got in at 357.
$PFC (PetroFac) FV = 930 vs 789 yield = 5%
Stock did get to 940 – where 2CentView took some profit – holding a core.

Insurance
$AV. (Aviva) FV=580 vs 482 yield = 4.4%
FV Unchanged – hold for the yield.
$AIG FV = 65 vs 60 1.88% Yield
Take profit at $65 (now 63.53)

Airlines:
$EZJ (easyJet) FV= 1950 vs 1624 3.4% Yield
HOLD.
$SAVE FV = $56 vs 55
Terrible run sees the stock trade down to $35. FV $10 LOWER. 2CentView has exited the core position.
$AAL FV=$55 vs 40
HOLD. Nice rally to $46.

2CentView Best Oil Picks revisited…

Tweeted back in Jan 2015 to get some exposure to oil we are naturally short oil – and going long offsets some of the costs higher oil prices impose on our every day spending.

Also, when there is such a quick sell off, stocks get oversold and this leaves buying opportunities – in quality oil stocks with good balance sheets or solid order books which will last through the down turn.

Companies like TransOcean, Sea Drill are too risky as they have a lot of debt.

Hopefully you got involved in one of the picks as they have done well even with oil prices virtually unchanged from Mid-Jan.

Fair Value updates below:

Oil Refiners [ least risky ]

$BP FV = 470 Yield 5.5%
$CVX FV=105 Yield 4%

Oil Equipment:
$HAL (Halliburton) FV=45 Yield 1.7%
$PFC (Petrofac) FV=1100 Yield 4%

2CentView has a core position in $PFC.

2CentView best Oil picks…

Buffett says be greedy when others are fearful – and there is plenty fear about how low oil will go and how much more pain will be felt by energy stocks.

The oil price decline took a breather today – buth this could be just short positions being covered over the US holiday and oil will continue to go lower next week.
Timing is everything so be patient – it may be better to wait for a stock to get a higher level before jumping in…but when oil prices go on a risng trend again it means less money in your pocket, so being long makes sense at some point.

If you buy, buy companies with strong balance sheets and pay a dividend who can weather an oil price around 30-40$ for the next year – analysts are forecasting declines in earnings in 2015 with a recovery in 2016 and 2017.

Some trading Strategies (take profit at Fair Value)
Oil Refiners [ least risky ]
$BP FV = 480 Yield 5.5% Stop 375
$CVX FV=110 Yield 4% Stop 99 [take profit at 115]

Oil Equipment:
$HAL (Halliburton) FV=49 Yield 1.9% Stop 34
And more risky:
$PFC (Petrofac) FV=1200 Yield 6% Wait for stock to go above 650 before considering buying, short interest is still high

Some Oil Drillers may look cheap e.g. $SDL (Sea Drill) but they have a lot of debt and are very risky

It may take a while ( 9-12 months) before stocks hit Fair Value – so buy stocks which pay dividends if you want to be paid to wait – it took 8 months before my gold positions started to make money!

2CentView does NOT have a position in any of the above but is considering one of the above trades.

BP – US Court rules ‘Gross Negligence’ – implying that BP…

BP is accused, according to the legal definition
“Gross negligence is a conscious and voluntary disregard of the need to use reasonable care, which is likely to cause foreseeable grave injuryor harm to persons, property, or both. It is conduct that is extreme when compared with ordinary Negligence, which is a mere failure toexercise reasonable care”

BP was provisioned for 3.5bn – not a potential 18bn under a gross negligence charge as there was no evidence of gross negligence in the trial – would a company the size of BP really consciously and voluntary disregard the need of reasonable care?

BP FV=510 – if you assume a 75% chance they get hit with the 18bn charge, then
(18-3.5)*.75 = around 11bn  for which they could be liable 70% – i.e hit of around 8bn 5% of the market cap – making FV=485.

If you got into BP recently around 470, stick with trade with a stop of 420.
Look to see if they continue buying back their shares today….
The news should not impact the dividend….

BP – FV=510 – 5% yield – worth looking at on pull back to 470

BP must be so glad they sold TNK BP and sitting on a pile of cash – which they are using to buy back shares daily around current levels.

They also have a 20% Stake in Rosneft – which does not seem to be impacted too much by Russia sanctions.

If you like BP, buy some around here, and some further down at 450 to average in at 460.
Take profit target = 525 which was the recent high looking for 15% gain with 5% carry.

Good name for the Dividend Yield + Potential Upside part of your portfolio.

Stop 420.