Jeffrey McLarty

Let’s get things straight, I’m an investor - not a speculator.  But, when I own a stock, I get intament with it, and often trade calls around owning it.  When @coffeygrinds said Cameco could see a $50 bid from China Nuclear, a bunch of clues fit together.  None of them are solid, and you might be dissapointed after reading this, but here is a summary of my last 2 weeks in Cameco.

I was short CCJ 2010 $50 puts.  Position was going against me for a couple months, but that was okay with me.  Then, on May 2nd, I woke up to find somebody excercised them early.

http://twitter.com/jmclarty/statuses/801857120

Sweet, he ate the time premium.  It was only a few points, but none the less a little bonus.  But think about this, he would have had to send that order on the 1st of may, check out the chart where that puts CCJ.  I thought nothing of it on May 2nd, but by May 8th,

http://twitter.com/jmclarty/statuses/806412897 

it’s was as if he knew something and wanted to get out of a very illiquid position and quickly.

That was reason #1. 

#2 - I was worried about the earnings, I sold calls, because I was worried and I was ready to part with my stock for $45 if it hit it. I twittered I sold $45 calls for june.  I’m just proving that I was skeptical on the earnings.

They missed, the stock sold off in the AM, and analysts setiment was mixed to mildly bearish.  The stock closed even - that’s the wierd part.  I was in Cancun so didn’t think much of it, and tweeted:

http://twitter.com/jmclarty/statuses/810572538.  The stock not selling off after both I predicted it, and the results coming in warranting a sell-off, is point #2.  Don’t worry, I covered my calls for $0.10 more than I wrote them for, after Andy Coffey’s tweet - see point #4.

#3 you got some crazy action on the front month calls and IV climbing.

http://twitter.com/jmclarty/statuses/812825420

#4 @coffeygrinds twittered

http://twitter.com/coffeygrinds/statuses/812798240

you could add a #5, that the stock is definately moving north on no news.

…The part where I’m skeptical is China National Nuclear ready to anti up the +$20B?  That’s the million dollar question, and why I’m not more bullish.

But I’m long the stock, and short puts, cause I don’t mind owning more in the $35 range.

That first part is the painful cheer of my University - *shakes head*

None the less, the world’s got problems ahead when it comes to Water.  I went through PHO, skimmed every 2007 report, and came to some conclusions…PHO sucks as a ‘water’ play. Tons of noise and random other segments.  As far off the topic as ‘Defense’ and ‘Oil’.  Also, too much emphasis on infrastructure, which is debatably not the best way to play it…I want to be in the names purifying, measuring it, desalinating if possible.

After my analysis, if you’re going to own PHO - well don’t. Instead, pick up these names:

AMN, DHR, CCC, PNR, TTEK, BMI/ITRI

They are the leaders of the fund, in my opinion, they are the ones offsetting the dogs. They still span the major areas that the rest of the stocks do and even still include some noise (eg DHR).

I liked TTEK and AMN, cause they are in ‘wind’ as well.  TTEK was the only company (that wasn’t a directionless conglomerate) that was into desalination.  BMI/ITRI have the market cornered on automatic metering….for now (boom/bust cycle happening there forsure).  CCC is into purifying water and air, and they add ultra-violet light systems exposure.  I have an ultra-violet light water purfication system at my cottage - it kicks ass.

I think I’m buying ITRI, CCC, and TTEK.

Update: New friend Buck Woodford, money runner at Teewinot Asset Management, likes TTEK too, he picked it before reading this piece, and it was in my head as the top choice (or the 3) before he added his two cents.  Great minds think alike I guess