Gulf of Mexico oil spill, Cramer suggested looking at Weatherford International(WFT) -- which he owns for his charitable trust -- given that it's very much a "dusty," or land-based, oil-services play.
This is what everyone is missing about WFT. They are very tied to Nat Gas....which is rising!
Oil drillers ticking to highs as reports circulate suggesting Dept of the Interior Sect could consider lifting moratorium early if commission recommends so (NBR, NE, ESV, DO, PDE, PTI, ATW, HP, HERO, PKD, PDE, RIG, WFT)
No show tonight either..I think
Jim Cramer Blog
Europe's Recovery Is Huge for Tech
By Jim Cramer
5/12/2010 2:27 PM EDT
Europe's gone from being a land mine for tech last week to being a gold mine for tech this week. The same people who wanted to short the cohort -- particularly the Hewlett-Packard (HPQ) , EMC (EMC) , Dell (DELL) , Cree (CREE) , SanDisk (SNDK) portion -- are now scrambling to buy and go long as we see the IMF-mandated government-spending cuts be implemented in the ne'er-do-well countries. IBM's (IBM) positive comments today are just icing on the tech cake.
I can't express how important this all is to the market, because we haven't had tech because of Europe, we have lost oil because of the futures and the Gulf, and as long as we have Congress in session debating financial regulations while authorities go charging banks, we don't get anywhere. That's a huge percentage of the S&P.
You know me, I key off of Apple (AAPL) and its derivatives, notably Cirrus Logic (CRUS) these days. Here we gallop toward my $300 price target, and if we get a 52-week high, it will be confirmation of what I thought -- the group's got the momentum despite the seasonal slowdown and endless chatter about motherboard inventory overloads and NAND oversupply.
I was surprised and let down by the Intel (INTC) reaction. (You can read it in our Action Alerts PLUS bulletin). Maybe Cisco (CSCO) can help the cause -- tonight's business, of course.
But you have to be gratified that with Europe coming back -- again, the spreads tell the story -- the big bear case might be off the table.
Amazing to me that everyone decided that this group was all about Portugal, Spain and Greece. I bet there are more PCs sold in New York than all three of those countries combined.
Random musings: The 10-year auction is looking good!
At the time of publication, Cramer was long EMC, Apple, Intel and Cisco.
RealMoney - Commentary
The Forecast Is Sunny for Weatherford
By L.A. Little
The risk/reward profile here is too juicy to ignore. More
Weatherford isn't the highest-profile name in the sector, but it does have an interesting setup. It pushed lower during the first week of February when the charts were at their worst, but that occurred on suspect volume. That event led to a good-sized bounce and finally another retrace that stopped shy of the lows.
If we project volume for the week, it looks to come in somewhere near 122 million shares; that would be the largest volume expansion over the past nine months. Think about that: Prices are pushing higher on what was first taken to be a bad earnings report and share volume is likely to swamp all volume on this time frame.
I'm not sure what that tells you, but to me it says that the clear target now is around $17.80 and that the stock will likely hit that price point this week -- if not today. If WFT removes that swing point with volume, which won't be hard given the lack of volume at that swing point, the next swing point will become the target. As long as volume comes in at the swing points and price is captured, WFT can walk higher.
We can see the resistance at the $17.80 swing point more clearly on the daily chart. That area is where the large gap down occurred back in early January on the last earnings report. The gap has since been filled and more backing and filling occurred. Yesterday, WFT made a new run to attack that swing point created on the fill of the gap.
To take a stock like WFT long -- a stock that has been an underperformer relative to its peers -- you have to see more reward than risk. Given the way volume expanded on earnings yesterday, those lows should hold as support. If they do not, then something more troubling is on the horizon. Thus, the risk is limited to the $16.41 area on a closing basis. The reward, as we have seen, is $17.80 initially, but will more likely be the next swing point at $21. Thus, there exists a risk of 80 cents for a reward of $3.70. I can't argue with those numbers -- that's why I added WFT to my list of longs yesterday. I just did the same with NBR today -- it, too, is showing good signals from a reward-to-risk perspective.
Until next time, keep trading the charts!
Jim Cramer Columnist Conversation
3/11/2010 9:42 AM EST
I reiterate that this is a fabulous chance to buy EQT (EQT) below the deal price. I didn't expect this, because the market is so bad -- great opportunity.
RealMoney - Commentary
Play for Big Upside in the Nat Gas Space
By Jim Cramer
You need to get into this fuel -- take a look at Anadarko or EQT this morning.
EQT (EQT - commentary - Trade Now) ... "I badly want to be in that secondary."
January 13, 2010 Jim Cramer's "Mad Money"
Cramer was bullish on Bucyrus International (BUCY Quote), Southern Peru Copper (PCU Quote), Boise (BZ Quote), Temple-Inland (TIN Quote) and International Paper (IP Quote).
He was bearish on Manitowoc (MTW Quote) and Pitney Bowes (PBI Quote).
Looking Abroad After a Mixed Quarter
Weatherford (WFT:NYSE) reported its quarter this morning; the company missed on the earnings line but beat on revenues. Earnings came in at 2 cents a share vs. the 11 cents First Call consensus, but Weatherford posted stronger- than-expected revenue of $2.43 billion vs. $2.28 billion.
Revenues were stronger than expected in the company's international division and weaker in North America, which is consistent with what Schlumberger (SLB:NYSE) and Halliburton (HAL:NYSE) have already reported. I'll be listening to what Weatherford is saying about pricing in North America, especially in the face of a 40% decline in the rig count -- both Schlumberger and Halliburton said pricing was improving in this region, and Weatherford indicated it was firming on its third-quarter call. I don't own this for its North American exposure, but rather its massive growth opportunities outside the U.S., and that segment didn't disappoint, posting a 16% increase led by strength in Latin America (revenue grew 59% year over year and 18% sequentially), Europe/West Africa (grew 28% from last year and 18% from last quarter), and Iraq, China and Malaysia.
The call is at 8:30 a.m. EST, and I will listen to what the management has to say about margins, pricing and its general outlook for growth. But the key to the story is its international operations, and at first blush I am pleased with the above-average growth in this division and the future opportunities that will enable it to grow three times as fast as its competitors.
Added just now......Just got the alert
the growth story remains intact and the best in the group. Also, the company generated $95 million in free cash flow in the quarter, and management again stressed no need for a capital raise. At the current price, the stock trades at 11.6 times fiscal 2011 earnings (the recovery year), 6.3 times price-to-cash-flow and 6.7 times EV/EBITDA. This is a meaningful discount (20%-30%) to its peers, and a lot of the bad news is in the shares.
After my trade I will own 4,000 shares or 2.21% of my portfolio.
He liked it yesterday. It was Over 12. Now we should buy under $10. A travesty. lost all Credibility
Dear Subscriber to TheStreet.com Stocks Under $10,
The model portfolio has lacked direct exposure to the energy patch for some time, but today we are adding Vantage Drilling (VTG:Amex).
After you receive this Alert, we will purchase 1,750 shares of Vantage here around $1.64, equal to 2.4% of the model portfolio. This leaves us the room to buy another 750 shares .
The company is an offshore driller with three rigs currently in operation and another one expected to come online in the coming weeks. Even though energy commodity prices have rebounded in 2009, it's been a difficult year for the drillers, as oversupply has hurt contract pricing.
That said, during the third quarter Vantage's two rigs respectively operated at 98% and 99% productivity, and we believe the entire industry is reaching an inflection point. The company's projects are spread out across the globe, with sites in the Gulf of Mexico, Africa and Southeast Asia, among others. A third unit, the Aquamarine Driller, began drilling in November.
There are risks to the story, including the fact that Vantage is a relatively new firm. The company's first rig started generating revenue in the first quarter of 2009.
Additionally, Vantage is admittedly a broken initial public offering (IPO) -- having come public in May 2007 at $8 a share -- but we believe there is real value in the rubble.
With a relatively new firm like this, gauging the strength of the management team is important. We believe that Vantage measures well on this test, as its three top executives have 76 years of combined experience, including time at major drillers like Transocean (RIG:NYSE) and Pride International (PDE:NYSE).
With a fleet consisting of only newly built ships, the company also believes that it has a strategic advantage, as more than 70% of the jackup rigs currently in the market are at least 25 years old.
This is a capital-intensive business, which means that the company carries a lot of debt on its balance sheet. At the end of the third quarter, Vantage had $265 million in total debt, compared with just $40.7 million in cash.
Just last week the company announced a proposed debt offering of $135 million, which it primarily plans to use for financing the remaining construction on its new rig, the Topaz Driller. Upon delivery, the rig is expected to begin operating in January. The key is that market demand continues to improve, and we believe that all of the company's rigs will see little downtime in 2010.
David Peltier & the TSC Research Team
Hold Citi for a Double
6:45 AM EST
The dilution here was expected, and this one is marching higher. More
Jim Cramer Blog
Hold Citi for a Double
By Jim Cramer
12/21/2009 6:45 AM EST
December 10, 2009
07:57 EDT WFT theflyonthewall.com: Weatherford risk/reward very attractive, says Wells Fargo
Wells Fargo notes that Weatherford's stock is trading well below its average historical multiple and the firm maintains an Outperform rating.