- Money Shows are one of the best free investment resources around. And everyone loves getting something for free. In fact, if you’ve
ever attended one of them, you know that if you set your coffee and Wall Street Journal down at a common table in the convention center,
chances are when you get back from getting a napkin the newspaper is gone and there is lipstick on your coffee cup.But for those of you who couldn’t attend the Las Vegas Money Show last week, we didn’t want you to miss out on all the fun. So we
asked our OptionsZone experts who presented at the show to give out their best Money Show for our readers who couldn’t make
the trek to Sin City. Apparently, what happens in Vegas doesn’t necessarily stay there.Keep reading to get their 10 best Money Show trades.
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Oil Service HOLDRS
By Michael Shulman
Wall Street is thinking the worst is over—it ain’t, but in the short term that doesn’t matter—and is biding up core
materials and commodities. Some have
exploded, while some are just moving up. The play here is what has yet to explode, and that is oil.Look at the Oil Service HOLDRS (OIH)—an exchange-traded
fund (ETF) made up of the stocks of companies that build and maintain oil and gas fields. It has a wonderful chart, and even
though call options are expensive, they have produced great returns in the past few months and should continue to do so.
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2 Chinese Solar Plays
By Tobin Smith
It looks like China is back on its 8%-10% growth track, at least in the short term. And thanks to renewable energy mandates from
the Chinese government that call for huge increases in solar and wind power development, there are two Chinese solar companies that
stand to win big: Yingli Green Energy (YGE) and
Suntech Power Holdings (STP).YGE and STP are low-cost providers of solar panels, and are extremely well-positioned to profit from the growth of solar in the
United States (Obamanomics will kick in soon) and China.Looking for more great trading ideas? Check out the Top
10 ‘New Frugal’ Stocks.
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Becton, Dickinson and Co.
By Nick Atkeson and Andrew Houghton
Becton, Dickinson and Co. (BDX) manufactures
and sells a broad line of medical supplies, devices and systems. It is a solid, 110-year-old company with a class-A list of institutional
equity holders. For full-year 2009, EPS is expected to be $4.93, and $5.41 in full-year 2010. This double-digit grower is trading
at about 12-times 2010 earnings, and 90% of revenue is generated from consumable products.The stock is only slightly above its 52-week low. And recently, we saw volume in the in-the-money BDX June 60 Calls (BDXFL) spike big as options investors sought to take advantage of this depressed price. Because they bought in-the-money
options, they have more absolute dollars at risk. To us, that means those options buyers have high conviction. BDX has outperformed
the S&P 500 (SPX) since 1998. We believe
this record of outperformance will continue for the foreseeable future.
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3 Canadian Energy Trusts
By Michael Shulman
Canadian oil and gas trusts have risen spectacularly and are a neat play on dividends, as well as growth. Check out Harvest Energy
Trust (HTE), Provident Energy Trust (PVX) and
Pengrowth Energy Trust (PGH).Buy the stock, collect the dividends, and then take those dividends (they are paid monthly) to play a “Black Swan” trade—buy
a put with a far out expiration date and a far out call. You have to crunch numbers on this one, and the stocks and options move a
great deal the day the stock goes ex-dividend. Returns will not be spectacular, but if you watch closely, there are times when this
Black Swan-type trade can work well.Dividends or growth—do you have to choose? Find
out.
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Ultra Petroleum Corp.
By Tobin Smith
We have hit a bottom in the economy, and that means an expansion is ahead. But not so fast—you can expect mild growth of about
2% starting nine to 12 months from now. But there are many areas of the world economy that will grow much faster than the overall
economy. And that is the sweet spot for finding trading opportunities coming out of the Great Recession.Natural gas is one such area. Prices have fallen from a high of nearly $12 last summer to about $4 per million BTUs. I expect natural
gas prices to rise on steady economic growth to $5.50 to $6 by next winter, turning excess supply into tight supply. To benefit from
this trend, investors should consider Ultra Petroleum Corp. (UPL),
especially below $50.
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United States Natural Gas Fund
By Nick Atkeson and Andrew Houghton
The United States Natural Gas Fund (UNG) follows
the prices of natural gas delivered at the Henry Hub in Louisiana, as measured by the changes in the price of the futures contracts
on natural gas that trade on the NYMEX. The price of UNG has been in a steady decline since July 2008, when it was trading at more
than $63. Today, it is about $16. Virtually every market-traded asset has seen appreciation since the March low, including oil, which
has rebounded from about $30 per barrel to above $50. And natural gas typically has a high positive correlation with oil.Recently, a lot has changed for UNG. From a technical standpoint, it is beginning to breakout from its 10-month decline on rising
volume. And from an options standpoint, call volume has been high. For UNG to return to where it started the year would mean a 50%
appreciation from current levels.Interested in getting started with technical analysis? Check out Technical
Analysis 101.
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Ford
By Michael Shulman
If you are a regular reader, please don’t laugh, but take a look at Ford (F).
If the market holds up or goes sideways, the stock is destined for $8 and change (it is currently north of $5). Options are
reasonably priced and very liquid.The company is getting great press, the new Taurus is coming out soon, and the stock will move sharply if General Motors (GM)
does go into bankruptcy. And, if the economy does manage to turn itself around, longer term the stock is a buy, as it is gaining market
share from everyone and will continue to do so in a healthier economy.As deep as the U.S. auto industry’s financial crisis seems to be, there may actually be a fairly simple solution. Is
China Detroit’s lifeline?More from our OptionsZone analysts:
