I wanted to go over all my positions today. I decided to sell out of APA today, with the continued deterioration in oil prices. I am now only holding WLL and EOG, of which WLL is by far the larger position. On the one hand I hate to be selling during such a strong pull back, but on the other hand it just feels to me like there could be quite some ways to go on the down side.
Chesapeake Energy (closed out):
I really should never have touched Chesapeake. This is a company that is still recovering
from the overly adventurous management of CEO Aubrey McClendon. I still intend to do a post on CHK at some
point, since it is a fascinating company. Overall the trade wasn’t as
disastrous as it might have been, since they did spin out seventy seven energy,
which is worth about $1.58 per share at current trading prices. Including the spin-out I netted 5.5% on CHK. Had I held it I would now be badly
underwater, with shares currently trading at $22.99 as of today’s close. So on the one hand, I never should have bought this, but on the other, at least I ended up in the black by a bit.
Apache (closed out):
Overall this was a decent trade, with a 22% return not including dividends. I bought it fairly well, and time will tell whether it was sold well. I would certainly look at buying it back if we get a pullback or I regain some confidence in oil prices.
EOG (open):
I should have held off for longer, but this is a stock that
I have wanted to own for a long time. I
may reassess after earnings. The current
position is relatively small. I consider
EOG to be the best managed oil large-cap E&P. The chart does look ugly though.
Whiting (open):
Whiting is by far the bigger position of the two remaining, at about 3x the EOG position. I should have taken some off the table, as it has now pulled back off the highs by about 15%. I intend to hold this through earnings on October 22 and then reassess. Overall I'm still pretty deep in the black with a 38% net gain compared to the average acquisition price.
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