Watch List, Saturday, 01/24/2009 by Jim Brown Click here to email Jim

HAVING TROUBLE PRINTING?

New Watch List Entries

FLS - Flowserve

PCP - Precision Cast Parts

CAT - Caterpillar

BKX - KBW Bank Index

Dropped Watch List Entries

THC - Tenet Healthcare

Current Watch List

HOC - Holly Corp

It is time to begin speculating on refiners. With gasoline prices rising and the driving season only a couple months ahead the refiners could be back in the black.

Company Info:

Holly Corporation is an independent petroleum refiner, which produces light products, such as gasoline, diesel fuel and jet fuel. It owned and operated two refineries consisting of a petroleum refinery in Artesia, New Mexico that is operated in conjunction with crude oil distillation and vacuum distillation and other facilities situated 65 miles away in Lovington, New Mexico (collectively known as the Navajo Refinery), and a refinery in Woods Cross, Utah (Woods Cross Refinery); owned approximately 900 miles of crude oil pipelines located principally in west Texas and New Mexico; owned and operated Holly Asphalt Company, and owned a 45% interest in HEP (which includes its 2% general partnership interest), which has logistics assets including approximately 1,700 miles of petroleum product pipelines located in Texas, New Mexico and Oklahoma (including 340 miles of leased pipeline); 10 refined product terminals; two refinery truck rack facilities, and a 70% interest in Rio Grande.

Breakdown trigger: $21

BUY June $22.50 Call HOC-FX (no leaps)

FLS - Flowserve

Company Info:

Flowserve Corporation (Flowserve) is a manufacturer and aftermarket service provider of flow control systems. The Company develops and manufactures precision-engineered flow control equipment, such as pumps, valves and seals, for critical service applications. Flowserve offers a range of aftermarket equipment services, such as installation, advanced diagnostics, repair and retrofitting. The Company sells its products and services to more than 10,000 companies, including engineering and construction firms, original equipment manufacturers (OEMs), distributors and end users. The Company operates through three business segments: Flowserve Pump Division (FPD) for engineered pumps, industrial pumps and related services; Flow Control Division (FCD) for engineered and industrial valves, control valves, actuators and controls and related services, and Flow Solutions Division (FSD) for precision mechanical seals and related products and services.

Breakdown trigger: $40

BUY July $50 Call FGV-GK

Breakout trigger: $53

BUY July $60 Call FGV-GL

PCP - Precision Cast Parts

Company Info:

Precision Castparts Corp. is a manufacturer of complex metal components and products, provides investment castings, forgings and fasteners/fastener systems for critical aerospace and industrial gas turbine (IGT) applications. The Company also provides investment castings and forgings for general industrial, automotive, armament, medical and other applications; nickel alloys and product forms, as well as cobalt alloys, for the aerospace, chemical processing, oil and gas, pollution control and other industries; fasteners for automotive and general industrial markets; specialty alloys, waxes and metal processing solutions for the investment casting industry; refiner plates, screen cylinders and other products for the pulp and paper industry; metal-injection-molded and ThixoFormed parts for automotive and other markets; low-pressure sewer systems; gas monitoring systems for the power generation industry, and metalworking tools for the fastener market and other applications.

Breakdown trigger: $54

BUY 2010 $70 LEAP Call YAM-AN

Breakout trigger: $69

BUY 2010 $80 LEAP Call YAM-AP

CAT - Caterpillar

Company Info:

Caterpillar Inc. operates in three principal lines of business: Machinery, Engines and Financial Products. Machinery deals with the design, manufacture, marketing and sales of construction, mining and forestry machinery. Engines business deals with the design, manufacture, marketing and sales of engines. Financial Products, consists primarily of Caterpillar Financial Services Corporation, Caterpillar Insurance Holdings, Inc., Caterpillar Power Ventures Corporation and their respective subsidiaries. In April 2007, the Company acquired Eurenov S.A.S. In November 2007, it announced the acquisition of the assets of the Blount Forestry Division and assumed product design, development and manufacturing responsibilities. In April 2008, Satyam Computer Services Limited acquired Caterpillar’s market research and customer analytics operations

Breakdown trigger: $26

BUY 2011 $40 LEAP Call VKT-AH

BKX - KBW Bank Index

Index Info:

The KBW Bank Sector (BKX) is a capitalization-weighted index composed of 24 geographically diverse stocks representing national money center banks and leading regional institutions. BKX is based on one-tenth the value of the value of the Keefe, Bruyette & Woods Index (KBWI). Founded in 1962, Keefe, Bruyette & Woods is long recognized as the "banking industry experts," following more than 200 commercial banking and thrift industries on a daily basis. Link to Components

Breakdown trigger: $26

BUY Dec $30 Call BQA-LF

Breakout trigger: $35

BUY Dec $40 Call BJC-LF