This will sound crazy but buy LUV, Southwest Airlines. You must think I'm crazy to buy an airline to get an oil play. Usually airlines are negatively effected by oil's high price but Southwest bought forward futures in oil looking out quite far at $29 a barrel. If they never sold another ticket and kept all their airplanes on the ground and turned around and sold their oil futures at current prices they would almost double their money.
LUV is an airline and hedged fuel costs account for less than seventeen % of their operating expenses. If you check a recent 10k you'll se they have significant contractual obligations to employees and for aircraft leases and purchases which selling off their hedged fuel would not begin to cover. Even with their hedged fuel, they've HAD SIGNIFICANT DECLINES IN INCOME.
Ok, I should defend my oil play. So, a 10k is like a footprint in the sand. And that's a good analogy, because it is really important where the sand is. In the case of LUV the sand is at the beach and at any time an ocean of money could wash over that footprint and make all the analysis derived out of that 10k mute. LUV earns about $300 million a year available to the common, it has an unrealized capitol gain in it's hedged oil futures worth about $250 million (my calculator). Now LUV could sell that position and earn a nears year equivalent of earnings....or .. LUV could under cut it's competitors fare pricing and kill all the competition. That would be a big mistake since the collapse of other airlines would bring a lot of airplane supply to the market and reduce the book value of LUV's own planes...or.. LUV could raise airline fairs somewhat (still allowing for a competitive advantage for itself) and allow its competitors to survive a little longer giving it time to raise cash to enable new routes cost effectively. This is of course assuming there is no change in the current price of oil.
actually this is about EXE, sorry. LOUISVILLE, Ky., March 17 /PRNewswire-FirstCall/ -- Humana Inc. (NYSE: HUM) announced today that David A. Jones, the company's co-founder and chairman of the board, will retire as chairman following Humana's April 26 annual shareholders' meeting in accordance with the company's directors' retirement policy. Mr. Jones, 73, who has been chairman since he co-founded Humana with the late Wendell Cherry in 1961. Mr. Jones and Mr. Cherry founded Humana on August 18, 1961. Throughout most of the company's history Mr. Jones served as chairman and chief executive officer, Mr. Cherry as president and chief operating officer. The company's first endeavor, a nursing home, opened in Louisville the following year. The enterprise grew rapidly and by the late 1960s the company, then known as Extendicare, was the largest nursing home operator in the United States. Extendicare became a public company in 1968. Under Mr. Jones' leadership, the company by 1974 had sold its nursing homes, begun acquiring hospitals and changed its name to Humana.