Seeking Alpha by Adding Beta

In general markets are trending downwards due to various bank problems. Last week saw major readjustments for banks like Bank of America and Barclays . It's best to stay away from banks for now. Now coming to stock of week: Company: Dryships (DRYS) Buy price target: $9 to $10 Sell target price in 12 months: $15 (for 50% return) Background: This was once high-flying stock of shipping industry. No other industry (except financials) would have impacted so much as shipping industry. With worldwide recession, there is less and less need for shipping goods and hence shipping index BDI has come down from 11000 to 800 (for a loss of 94%). However recently BDI has shown some life and has come back from below 800 to above 900. Dryship is an excellent barometer for shipping industry and when economies recover in 9-12 months, shipping industry would recover first and Dryship would benefit. With last week's news about cancelling dividend and ship orders would save company about $1.4B c

A new era would start this week with Obama becoming 44 th President of USA. It is indeed an historic moment in our lives and for a moment we should forget about all the economic troubles around us and celebrate this moment. I hope we can cherish this historic moment for rest of our lives ! Now coming to stock of week: Company: Hartford Financial Services ( HIG ) Target buy-price: $12 to $14 Target price in 12 months: $18 to $21 (for 50% return) Background: Provides all kinds of insurance and asset management 200 year old company in 2010 Revenues: above $20B Profit of about $4.7 per share with P/E of less than 4 Market cap: approx $4B It still issues dividend of about $.32 per Q yielding about 10% Recent catalysts: approval as bank holding company opening door for becoming eligible for TARP funds, coverage in Barron's on 1/17/09, positive surprise on earnings pre -announcement Completed more than $2B capital raise from Europe in last 6 months providing a solid cushion against furth

After few days of upswing, markets started its downward trend last week and lost nearly 4-5% in first full week of 2009. Despite this, my last week's recommendation HUN held up pretty well and still provides a great buying opportunity. Now coming to this week's pick: ETF : OIL Buying price range: $21 to $ 23 12-month target price range: $ 33 (for 50% gain) Context: Oil has come down from $147 to $40 in less than 6 months. While upward movement was not justified, downward movement to $40 is also not justified. Given that world-wide economies are slowing, demand for oil is down and could be down by 5%. However with all stimulus packages rolling out later this year, impact of liquidity taking place and OPEC cuts, I am expecting oil to climb back above $ 60. When that happens, OIL ETF would go over $ 30 and would provide an excellent return. This ETF would have lot of volatility and you could get buying opportunity even below $20. However at current price of $22, downward risk i

In 2009, I am starting a new weekly posting on my blog which would list only ONE investment idea - it could be stock, ETF or bond (or cash:-) Let's start the series with unlikely recommendation. Company: Huntsman (HUN) Sector: Chemical Revenues: Approx $10B Buy price range: $3.3 to $3.7 12 month target price range: $6-$7 Background: This company was being taken private at $28 by Apollo and they fought with another company which was offering $25. This was all before economy went into recession. After lot of court challenges etc, both sides agreed to settle with HUN receiving close to $750B as break-up fee. Chemical companies are typically very sensitive to recession and many of them go BK if they don't have enough cash cushion. After the deal was scrapped, this stock got punished by 50% since folks thought that there is no future and it is going BK. However after receiving close to $1B in cash from Apollo ($250 M for notes), I think this company is survivor and do very wel

Happy new year to all ! Finally 2008 is over - worst year in terms of stocks returns since 1931 ! When 2008 started, absolutely no one expected it to be so bad. Almost all portfolios with are down anywhere between 40 to 70% down. So I decided to start year with making only macro predictions. Here are 5 trends which I will be watching. With first day of upside, DOW has shown some positive momentum. My prediction is it would cross 10000 (and S&P 1000) by 6/30. However another bull run would start only if it stays above those levels for 3-4 months. Check out ETFs like SSO Baltic Dry Index ( BDI ) is down 94% since it peak in Jun 08. It is currently hovering around 800. With mega stimulus packages by Obama and China, I am expecting demand for shipping to increase. BDI would cross 1000 by 4/1 and could touch 1500 by year end. Check out ETF like SEA or stocks like GNK , DRYS, EXM Oil - it has seen its best and worst years. Now that it has almost touched $30, I am expecting it to go