I just read an unbelievably thorough report about cheap oil and who stands to benefit or lose. This blog will not be structured to entertain your fat fucking faces. Instead, it is an invitation for you to consume some information.
Energy drop benefits middle to lower income families most
Headline inflation should be pressured downward.Morgan believes oil will bottom in Q2 of 2015 and suggests to overweight oil. Their extensive studies over 7 previous cycles suggest the energy sector bottoms one quarter before earnings bottom and markedly outperforms the market. They cite energy prices are at trough levels on a p/b basis.
Airlines should benefit across the board. However, several of them are hedged at $100+ oil, except two: AAL and ALGT have ZERO oil hedges and will participate 100%.
44% of ALGT expenses are fuel.
The plebeian sub $50,000 income benefit most, especially idiots who buy $150 sneaker. FL, FINL and BWS are foot ware favs and PLCE for bratty kids.
Asset Managers: KKR, APO, OAK and BX benefit most, due to lack of energy exposure and tonnes of cash.
Conversely, CF and AB are fucked.Sell automakers.
Fuel efficiency standard play: BWA
Lower fuel might lead people to add items to their cars. Bullish on MGA, LEA, DLPH, ALV, HAR, TEN, DAN, AXL
TSLA is fucked.
SYF has zero loans to energy space.
COF and FITB also have little to no energy exposure.
HBHC, BOKF,CFR and ZION are leveraged to oil, as much as 15% of loans. Ergo, they’re fucked.
Get long domestic beverage stocks: MNST, STZ.
CHD and CLX have 80% exposure to domestic sales, NWL 68%.
Chem plays with large oil inputs include: PPG, RPM, SHW, VAL.
Challenged: DOW, LYB, EMN
Less rail traffic from Bakken is net positive for coal, who’ve been hampered with those fucking rail cars filled with frac sand.
They also benefit from lower diesel expenses. ACI is 83% hedged with call options (idiots). ANR is 40% hedged for 2015. BTU is 65% hedged. Every $10 move in crude equals $12 mill in cost savings. CLD takes in $7 mill for every $10 move down to $70, then $5 mill below $70.
X may be fucked due to diminished demand for oil country tubular goods.
Financials who benefit from lower fuel: ALLY, AXP, DFS, SC.
Reduced shipping costs help AMZN.
LII, IR, WSO and SWK benefit from boost in discretionary spending, while DOV and ROK are fucked because 20% of their revenue comes from men with big hats who live in oil fields.
Bullish on refiners: MPC, VLO, TSO and WNR. They hate Canadian oil sands and do not like XOM, CRC and HK.
They are bullish on items sold at gas stations and trade ups at grocery: WWAV, HSY, MO, LO band RAI. Might I add, IMKTA, CASY, CST and COST have gas station exposure too. PTRY was another gas station play, but was recently acquired.
Healthcare: CVS, WAG, DGX, LH, ABC, MCK, CAH all benefit from poor people with more change jangling around in their pockets.
VAR has russian, middle east and latin american exposure.
PCAR, CMI, WBC, NAV, ALSN benefit from big ass truck demand, while CAT, URI, MTW and TEX suffer due to oil and gas exposure.
Lower oil means cheaper expenses for aluminum makers: AA, CENX, NOR.
FCX and TCK have exposure.
They like insurance names with little exposure to Houston, such as DRE, LPT and PLD. They hate EGP, MAA and ARPI for exactly that.
Again with the low end theme, Morgan favors restaurants who feed homeless people: TXRH, EAT, DRI, SONC and JACK.
Retail names that tend to do best: TSCO and WSM.
Specialty Retail: ARO, BURL, ROST and TJX.
Have at it.
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Does the tape generally do well when say 25% of it is fucked? Last time i checked poor plebs do not matter. Ever. Happy Holidays.
Iron
Companies who cater to homeless men do in fact benefit.
I did an exercise the other day trying to accomplish the same thing – beneficiaries and losers with lower oil. I’m surprised that no solar companies made the short selling list. Kind of hard to justify putting up solar panels when energy prices are falling.
most excellent, Herr Fliege … danke
A really good industry to hedge your portfolio is fantasysportaction.com
That’s http://Www.fantasysportaction.com for the plebeian sub $50,000 income earners the article above mentions so eleuquantly…
Hard to sympathize w someone losing their home while their kids romp around in $150 sneakers
Much respect for including Mr. Crosby, Dr. Fly. The man truly loved the islands. Pretty sure Dick McIntire played steel on most of his tunes. An acquired taste, but he was a true pioneer of the instrument as it became electrified and amplified. https://www.youtube.com/watch?v=MQyGVxG8cbI
and more importantly, thank you for this post. You better believe I saved it!!
damn you. i can’t keep that song out of my head now. Mele Kalikimaka to you and yours. May Santa bring you 500% gain in 2015
$150 sneaker ? Get with the program you elder statesman. Michael Jordan gets 75 mil per year from his deal with NKE. $150 gets you just a nice pair these days. Try $200 – $225 for the latest and better sit down Grandpa because yesterdays new release of an Ultimate Gift Set of two Jordans ( 11’s and 29’s ) went for $500.
And yes old one – they sold out. Merry Christmas.
and yet…. my fat fucking face WAS entertained. Arrrrr.
Now this is a post !!!!! Former bloggers should take some notes. Holy hell.
Just imagine boys and girls, you too can go from a fantasy life full of self congratulatory days of 10%, 20%, 30% gains in the stock market to a fantasy life as a double secret agent crime fighter. Find out how in the magical postings in the “Old School” section.
It seems like nobody has a clue. I think the rich benefit more than the poor because they use so much more energy. They will have more spare bux to invest.
So oil crashed. Gold did before that. Biotech is about to crash. What sector / commod gets crashed next?
Also, got $GPRO puts at 64, shrug.
Fly, ton of value in this post, thanks. Under asset managers, assuming you meant CG as opposed to CF. Any insight as to why they are fucked? Already heavy into energy sector and/or lack of investable cash?
You really think TSLA buyers care about fuel prices at their income levels?
Yeah I never understood this argument. It may have a minor effect but people don’t buy them to save on gas.
Is there any way to find out which companies are placing their hedges now, locking in these oil prices?