MONSTER PORTFOLIO 2011
Balance: Inception 01/07/11
$1977.32 Stock
$13.65 Cash
Total $1990.97
$1,506.05 Stock
$1,059.87 Cash
Total $2,565.92
Since Inception: -1.53%
Back out cash inflow and we have a balance of $1,960.42.
Welcome back everyone! So I was able to dig into Weatherford’s (WFT) 3rd qtr. earnings transcript last week and I’m here to say that WFT appears to be doing all of the right things. (All of the right things that are within their control.) The positives outweigh the negatives. First I will cover the negatives to get them out of the way. These are the issues that negatively impacted their earnings.
Negatives
1.
An increase in the effective tax rate reduced the
earnings by $0.01
2.
Foreign exchange book losses accounted for a $0.03 hit
against earnings
3.
Middle East, North Africa, and Asia Pacific revenue
declined $45 million due to increased start up costs in Saudi Arabia, Kuwait
and Iraq, contracts in Algeria lapsed and WFT was forced to demobilize and relocate
outside of the country, and lastly higher incurred costs in Iraq due to shut down
costs, idling costs, and problems with recent started operations
4.
Net debt increased roughly $301 million for a grand total
of $7.3 billion in debt
1.
Quarterly revenue reached a record high of $3.4 billion
2.
Year on year revenue growth of 33%
3.
Sequential quarterly growth of 11% (Always a positive to
see revs higher on back to back quarters.)
4.
Continued positive outlook for North America
(Conservatively)
5.
Positive outlook for Canada which has lagged for years
6.
Increasing margins and volume in certain product lines
including artificial lift, production optimization, formation evaluation, and
open hole completion for North America in 2012
7.
Positive outlook in Latin America, Russian, and
European operations
8.
Increased activity in North Africa (Libya and Algeria)
9.
Margin improvements internationally for the 4th qtr. and
strengthening into 2012
10. 15-20%
of North America earnings is from fracking, which means more room for growth
I would also like to disclose that I sold a large stake in WFT on Thursday and Friday as selling into strength is what I do. This was mostly because I had to much invested in WFT and I had to reduce my risk. Since October 4th Weatherford has increased in value by 35.97% as of Friday’s close. A run like that deserves a little profit taking. You have to lock in your profits while the gettin is good! Remember I try to think like the big fund managers. And currently they are selling as we saw some profit taking today. My objective is to make as much money as I can while reducing my risk along the way!
Westport Innovations (WPRT) reports tomorrow. Depending on the outlook I may try to sneak back into the speculative alternative energy play for the remainder of the year. I still have a goal to finish up 10% on the year and I have to pick my stocks wisely as I’m running out of time. LOL!
All research was derived from Weatherford’s website and can be viewed by clicking on WFT (hyperlinked)
Have a great night!
Clay-
“When in doubt buy more!”
Current Holdings:
Apple (AAPL)
Cosi Inc. (COSI)
Weatherford International (WFT)
