Fly Sell: TER

I sold out of my TER position.

Tis the season to be long oil and gas stocks. Just like March was for refiners, April will be the month for a wide range of oil and gas stocks. Get your fucking grease on.

I will be posting the April seasonality report inside of The PPT tomorrow. As you know, seasonality stats are available on demand for club members. Having said that, I realize many of you need shit served on silver platters, else you will not know how to eat shit on your own. That might sound disgusting because it is.

Sorry, I get distracted. The point is, oil and gas stocks typically do well during April. I will reserve my picks for a later date.

Going into Friday’s jobs report, I like MWW. They have been operating like drunken Mexicans flying airplanes for the better part of 3 years. However, should we get an upside surprise in the numbers, that fucker is going higher.

By the way, a few homosexuals complained about me to the overlords at Stocktwits, saying “how dare you put that beast of a man on the recommend list. He says mean things about us homos.” Look, just because I say “homo-hammer” and “faggot” doesn’t mean I hate gays. “The Fly” couldn’t care less about your sexuality, so take the dicks out of your mouth and ears and man up a little, no?

Top picks: OXY, WNR

Everything was up but my airlines, which is entirely acceptable because they are hedges against my refiners. I was up again and my gains are about 12%.

In my hyper cocaine personal account, I am up 22%, mainly long WNR—leveraged to the max. I am telling you exactly what I am doing in that account because I am going to show you something spectacular. You surf the web, in search for counsel. Most have a good stories and a neatly groomed mustaches, but little personal success, zero substance. Like they say: “those who choose to teach are real dicksuckers in real life.”

“The Fly” is a man of great circumstance.

If I wanted to, I could burn this website down to the ground, fire all of my clients and live out the rest of my days in the mountainous regions of Puma Punku. How many of you goat fuckers can say that about yourselves?

“The Fly” conquers all and plants his banner into the faces of everyone, friend or foe.

Top picks: WNR, VLO, X, OXY

Back from boredom, I added to X.

Okay, it’s official: the market is really, really starting to bore me. The monotony of the market is grinding away at my fucking soul. It’s fun making money. But then it gets to a point like “where am I going with this?” I suppose you chart chompers have it easy, not having to ever use your brains for anything. In many regards, you are like dogs fetching bones.

Go find me another chart, boy!

No, but seriously, I need to unwind a little. I don’t want to slap people with hot slices of pizza or even cold slabs of ham anymore. Life is just not the same, when inflicting random acts of violence against people isn’t exciting.

I own X, OXY, airlines, refiners, blah, blah, blah. Maybe if I lost a million or two today, that might get me interested, like “hmmm, that was really fucked up” sort of way. The website keeps me busy, especially my new news idea. However, that gets repetitive too. Post a bunch of ideas, read comments from people halfway mentally retarded, laugh at said people–ban a few for life.

One thing that makes me laugh is the secret hatred so many third rate bloggers have for me. Really? I don’t give a fuck about you, not even a little. I rarely talk about other bloggers because it’s none of my business. People have to make their own life choices and I am not one to judge whether they are right or wrong.

I piss on your heads from my balcony.

Anyway, I am stepping out now in search of excitement. Hopefully by the time I come back the world will be on fire and the market would have flashed crashed a few dozen times, and shit.

The last time crack spreads were this high was 2007. However, keep in mind, there wasn’t an egregiously wide Brent/WTI spread like today. So, in many respects, today’s environment is better for the refiners, providing the whole house of cards thingy holds together. At any rate, one of the things I like to do is look at maximum earnings power during peak cycles. Looking back in time, when a certain industry is at its peak, can really tell you a lot—providing you believe history is about to repeat itself.

So, I gathered and combined all the 2007 EPS numbers for VLO, WNR, HOC, FTO, ALJ, DK and TSO. I did the same thing with share prices and derived at a group PE.

2007 combined share price (refiners): $280.53
-combined EPS: $28.43
-combined PE: 9.86

Now, here comes the tricky part. If history is really about to repeat itself, the current analyst estimates are garbage, utterly useless when trying to determine a fair price. So, to placate my inner demons, I took the high end estimates for 2012, even though they may prove to be too conservative. Here are the results.

Combined current share price: $185.73
-high end estimates, 2012: $25.22
-current FPE: 7.36

Naturally, there is much more to the value of a stock than EPS. One needs to consider macro events, as well as buyout premiums. However, one thing is for certain: if current spreads sustain for a lengthy period of time, analyst estimates are going way the fuck up, in order to catch up with reality. Based upon past history, the refiners are at least 30% undervalued, at current prices—in my opinion of course.

VLO was trading at

Stiff intraday reversal reattached the cocks of those who are short. Today’s dip gave them life, something to look forward to. Within my holdings, I saw 1%+ dips in my refiners, even though crack spreads were up 2.2%. However, for the most part, I was green, with gains in X, FORM, DAL and OXY closing flat. Oh, and my TER was down. Basically, today was a circle jerk type of day. It’s the sort of day that you just sit around, thinking of stuff to do and end up shooting yourself out of a cannon for fun.

Railroads were strong, as well as steel. But again, everything sort of drifted away into the bell, like a hooker in a police car.

Bottom line: we’re back at it tomorrow with new and eventful shit to discuss. Perhaps the middle east will get sucked into a giant vortex, bringing world peace to the world stage. Who knows? For now, I am sticking with a long refiners/long airlines thesis, until it loses its utility or novelty.

I added to my DAL position.

Enough of the pussy talk, there is coin to be made. Crack spreads are sprinting higher this morning, up more than 3% to $23.68. More importantly, WNR has an edge. Do you know what said edge is?

Let us begin.

Domestic refiners make their money from a multitude of spreads, one of which is gas—another Brent/WTI. WNR has their refineries in New Mexico, El Paso, Texas and Virginia. They are within delightful proximity to Cushings, Ok aka where the glut supply of WTI  is stored.  As the world burns, it is my belief the spread between WTI and Brent will widen. As it widens, the executive management team over at WNR will sit back, over a nice tall glass of scotch, and enjoy the ride. Profits will soar. The company will do $7 billion in revenues this year and yet only 35% of the shares are owned by institutions.

How does that stack up to the other refiners? Let’s have a look.

HOC: 99%

TSO: 89%

FTO: 83% (acquired by HOC)

MRO: 81%

HES: 80%

VLO: 76%

SUN: 73%

CVI: 60%

WNR: 35%

Does that make sense? Of course not. Furthermore, with WNR‘s earnings set to explode, thanks to widening spreads, coupled with an industry high 25% of shares sold share, I reckon the perfect short squeeze is about to occur. If you are managing money and need exposure to the refiners, you cannot ignore WNR, especially with a FPE of 9 and 35% institutional ownership. Just my two cents.

Aside from the refiners, I like the airlines for a hedge and I am warming up to the idea of beaten down large caps.

More on that later.