Home / End of an era

End of an era

Save This Post: Cheap Oil and Those Who Profit from It

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.

Comments »

ANNOUNCEMENT: “The Fly’s” Final Fuck You

Since 2006, I’ve been telling the internets to fuck itself, for a variety of reasons. For one, I was young, belligerent, and wanted to get a few points across. It is a fact when one uses profanity to deliver a message, it gets amplified. People pay attention to the message when it is outlandish and I used this to my advantage.

Also, my children were young and not really into the world of internet connectivity. My wife, as I’ve stated here numerous times, hardly knows the persona “The Fly” exists. I don’t believe she’s ever bothered to read the site, as she’s too busy dealing with keeping up with the fashions of the day.

But I’m afraid all good and bad things must come to an end. This will be my final profanity laden post. Frankly, I don’t care to use words of the profane nature in the real world, so why use them here? While it’s true, I do partake in the profane when jostling with friends: I never use this sort of verbose at home, especially around the kids.

My vocabulary is much greater than yours and I do not need the application of the profane to have my message understood and amplified. I’m a bit older now and definitely more mature. I’m no longer hopped up on Monster Energy beverages and I certainly do not drink coffee. Most importantly, my kids are getting older and I’d hate to become a source of ridicule for them sometime down the road.

Since this is my final profanity laden post, I’d like to offer a special “fuck you” to a number of people who’ve supported the site throughout the years, helping Le Fly (as he’s popularly known in France) become a household name, a great topic of debate at dinner tables across the continents of North America, South America, Europe, Asia, Australia and Antarctica (fuck Africa).

The following people can fuck themselves:

The iBankCoin Staff
The iBankCoin IT Department, spearheaded by the Chevalier of Duluth, Vincenzo Illuminati
All Former iBankCoin Staff
Chuck Bennett
The Devil
All Readers and active participants of iBankCoin
All of the miscreants who I’ve banned throughout the years, all 2,000+
Howard Lindzon and his lovely sidekick Mr. Pearlman
Reformed Broker
All fucktards who follow me on Twitter
All of the homeless men who I’ve had the pleasure and honour of kicking down stairs and idle manholes
Old fuckers in wheeled chairs
The assholes who swore to God the SBUX-TEA deal would fall apart
TIM (both of them)
Karl “Blue Blazer Special” Denninger
Abnormal Returns
The Kirk Report
Andy Swan and his stronger brother Landon
CNN Money
The Homosexuals over at SeekingAlpha
Jefferson Krull
The Yahoo Finance Message boards and all of its trolls
Market Troll
Chart swing trader
Option addict
The Globe and Mail (faggots)
The Daily Crux
The retarded folks over at Stock.ly
Pattern Profits
Todds Trade
That asshole from New Zealand who may never be named
Business insider and their robot Joe Weisenthal
Dennis Kneele
Beccy Meehan
Brent Rose, actor extraordinaire who did “The Fly Show”
Investing Channel for selling ads on such a profane dwelling, supporting the 2nd amendment rights of our employee Woodshedder by allowing him to purchase assault weapons

Last but not least, I’d like to give a special “fuck off” to the assholes at WordPress who’ve made this blogging experiment run seamlessly throughout the years.

It’s the end of an era and the beginning of a new one. May the next era be filled with topped hatted gentlemen– strolling about these halls wearing white gloves armed with black canes, beating their pet monkeys about the cranium for shitting on the Persian rugs that we hold so dear.

UPDATE: Regrettably, in my haste, I forgot to offer a final “fuck you” to StockTwits founder and world class yachting racer, Soren Macbeth. Soren and I go back to the early 1980’s, when I’d blow up his tree houses with jelly jars filled with gunpowder. Today, Soren spends his time studying botany, in an effort to find a cure for homosexuality. It’s rumored that his beta cure is being used as we speak at the StockTwits HQ in sunny Coronado.

Comments »