Monday, August 3, 2009

Mid-Morning Thoughts

The market is moving higher again today, and the S&P briefly touched 1000. Here's what I'm following this morning:

Loews reported and missed on estimates. Yet were still seeing the stock rally 5+%. Their results have been hurt mostly by CNA financial (CNA) and their exposure to mortgage-related investments. I kind of view this as a back door way to play Diamond Offshore, which is a great company. Loews is an interesting play as you can buy most of their assets (which the exception of Loews Hotels) directly on the open market. But by buying Loews stock you get a little more diversification, but still ownership in some great businesses, and you get Loews management, which is outstanding. And because of their ownership in things that have seen their value decrease, you can buy the entire company at a discount, which potentially gives you access to shares of a company like Diamond Offshore at a discount.

Natural gas is up again today. UNG specifically is up close to 7% as a write. I'm holding all my shares here, and like the prospects of gas moving ahead.

Also in the natural gas realm, I spotted a company called Contango Oil and Gas (MCF). Here's where I first spotted it. I did some more digging and read an interesting presentation on their website. They are in an interesting niche as they attempt to be a super low cost producer. These companies are interesting as they often produce gas for $1 to $2, and are still coming out okay with prices at extreme low levels like $3.50 to $4 right now. You can only imagine how profits would improve if gas spikes again. They are one of the only companies like this with virtually no debt as well, which obviously is appealing.

Lots more earnings-related stuff coming up this week.

1 comment:

Anonymous said...

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