Category Archives: $PFC

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  Р 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.

$PFC(PetrofFac) Surging post results – maintains dividend, strong order book…

PetroFac announced a good set of results and positive outlook even against a backdrop of lower oil prices.

Market was probably expecting some kind dividend cut – but as mentioned on Jan25 there is a good chance they could maintain their dividend.

Took profit on a 1/3rd of the position a little early (original target was 850) – but with oil prices so volatile and with stock surging through 850 who cares!

Keep a core postion – great dividend yield > 5% even with stock at 880! so if you’re cost basis is much lower you have leveraged the yield on the overall investment of capital.

FV=1050 now – earnings have been revised lower but this may be revised up again following results.

$PFC(Petrofac) took some profit at 791 to reduce cost basis…after 20% run up..

Sold 30% of my position, reducing cost basis to 575 on the core.Can sit back now – hopefully they will keep the dividend around 5%.

Target was 850 – but that was not expected for 6 months – when a stock runs up so quickly it is better to take some profits lower down (at least 20% or more though) and wait for a pull back or divert profits somewhere else…

Pulled the trigger on $PFC (Petrofac) at 655…here is why…

Petrofac have a 3 year order book totalling $21bn

The bulk of their business is in the middle east where spending on oil projects continues and a region (Saudi, Kuwait mainly) who are not affected by oil lower prices in the way indebted shale oil producers in the US are.
They recently secured a $4bn project in the middle east.

There is a good chance they will maintain the dividend so the stock yields 6% if they do.

The 2014 P/E ratio is only 6x

Some are predicting oil prices will go back to $80 by the end of the year.

Even with earnings downgrades the FV=1200 so good risk reward.

2CentView has a trading position in $PFC opened at 655, take profit target 850 to 950 area. Stop 525.

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.