Comments on: This is undervalued- My Perspective http://www.optionpundit.net/fundamental-analysis/this-is-undervalued-my-perspective Powerful option trading strategies for consistent income. Credit spread, Iron Condor, Calendar spread, Double Diagonal, Income Spread. Fri, 09 Jan 2009 01:02:01 +0000 http://wordpress.org/?v=2.5.1 By: OptionPundit | National OilWell (NOV) got a Good Deal http://www.optionpundit.net/fundamental-analysis/this-is-undervalued-my-perspective#comment-12438 OptionPundit | National OilWell (NOV) got a Good Deal Mon, 17 Dec 2007 16:02:30 +0000 http://www.optionpundit.net/fundamental-analysis/this-is-undervalued-my-perspective#comment-12438 [...] assess GRP from two different valuation model perspective and had arrived at $72 as intrinsic value with certain growth assumptions. National Oilwell Varco (NOV) agreed to buy Grant PrideCo (GRP) for [...] [...] assess GRP from two different valuation model perspective and had arrived at $72 as intrinsic value with certain growth assumptions. National Oilwell Varco (NOV) agreed to buy Grant PrideCo (GRP) for [...]

]]> By: OptionPundit http://www.optionpundit.net/fundamental-analysis/this-is-undervalued-my-perspective#comment-6064 OptionPundit Sun, 30 Sep 2007 12:48:04 +0000 http://www.optionpundit.net/fundamental-analysis/this-is-undervalued-my-perspective#comment-6064 Dear Zach, thanks for stopping by. There are couple of ways to play this, which depends on how greedy one is. 1) One can simply buy shares and enjoy the ride. 2) One can buy shares and buy ATM puts to hedge it. 3) One can by shares, buy ATM put and sell OOM calls to finance purchase of puts to create bracket and limit the gains. Keep repeating it if GRP either continue to rise or fall (Very little risk). 4) One can sell naked puts (say if you want to buy at 50), if assigned buy shares, sell puts again and write calls to make money from either side movement. 5) One can buy simple straight ITM (or OOM) calls, and many more ways (i.e. credit spreads, calendars, etc.)!!! I am personally inclined for #3. Profitable trading, OP Dear Zach, thanks for stopping by.

There are couple of ways to play this, which depends on how greedy one is.

1) One can simply buy shares and enjoy the ride.
2) One can buy shares and buy ATM puts to hedge it.
3) One can by shares, buy ATM put and sell OOM calls to finance purchase of puts to create bracket and limit the gains. Keep repeating it if GRP either continue to rise or fall (Very little risk).
4) One can sell naked puts (say if you want to buy at 50), if assigned buy shares, sell puts again and write calls to make money from either side movement.
5) One can buy simple straight ITM (or OOM) calls, and many more ways (i.e. credit spreads, calendars, etc.)!!!

I am personally inclined for #3.

Profitable trading, OP

]]> By: Zach http://www.optionpundit.net/fundamental-analysis/this-is-undervalued-my-perspective#comment-6044 Zach Sat, 29 Sep 2007 16:54:55 +0000 http://www.optionpundit.net/fundamental-analysis/this-is-undervalued-my-perspective#comment-6044 How would you play this name? Would it be worthwhile to buy some in the money December options so premiums wouldn't be too high? Sell some at the money puts to capture the current premium? It seems the volatility may make purchasing options better than selling them in this situation. thanks, Zach How would you play this name? Would it be worthwhile to buy some in the money December options so premiums wouldn’t be too high? Sell some at the money puts to capture the current premium?

It seems the volatility may make purchasing options better than selling them in this situation.

thanks,
Zach

]]> By: sjfischr http://www.optionpundit.net/fundamental-analysis/this-is-undervalued-my-perspective#comment-6031 sjfischr Fri, 28 Sep 2007 13:20:20 +0000 http://www.optionpundit.net/fundamental-analysis/this-is-undervalued-my-perspective#comment-6031 I dunno--Morningstar rates it terribly--way too overvalued. I know they are conservative, but "its broad mix of drill pipe and drill bit businesses on several continents helps offset regional or subsector downturns. But the company remains in a cyclical, no-moat business subject to earnings and cash-flow volatility." On the other hand, Morningstar's modeling is often far too concerned about cash flow, and less about market conditions. The Natural gas market can clearly eek out a few more bucks on the price. I would go for it, with caution. On the other hand, it took Andarko a while to get out of its rut, right? I dunno–Morningstar rates it terribly–way too overvalued. I know they are conservative, but “its broad mix of drill pipe and drill bit businesses
on several continents helps offset regional or subsector downturns. But the company remains in a cyclical, no-moat business subject to earnings and cash-flow volatility.”

On the other hand, Morningstar’s modeling is often far too concerned about cash flow, and less about market conditions. The Natural gas market can clearly eek out a few more bucks on the price. I would go for it, with caution. On the other hand, it took Andarko a while to get out of its rut, right?

]]> By: OptionPundit http://www.optionpundit.net/fundamental-analysis/this-is-undervalued-my-perspective#comment-6026 OptionPundit Fri, 28 Sep 2007 09:18:56 +0000 http://www.optionpundit.net/fundamental-analysis/this-is-undervalued-my-perspective#comment-6026 Bob, thanks for the comment. I have considered debt, but relied on debt/equity ratio to guide me. I don't think having debt is bad. There are "good debt" and "bad debt". One need to dive deeper if debt is a concern. Dayton, first method is a classic text book method to calculate NPV of expected future cash flows using appropriate variables. Profitable trading, OP Bob, thanks for the comment. I have considered debt, but relied on debt/equity ratio to guide me. I don’t think having debt is bad. There are “good debt” and “bad debt”. One need to dive deeper if debt is a concern.

Dayton, first method is a classic text book method to calculate NPV of expected future cash flows using appropriate variables.

Profitable trading, OP

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