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Below is a market neutral trade I e-mailed to members of the market neutral trade notification list Wednesday night. I plan to place this trade Thursday.

Toreador Resources Corp. (TRGL) is an oil and gas E&P based in France. I shorted TRGL as part of a market neutral trade (paired with a different long position) last July, when it was trading below $6 per share. I got stopped out for a loss a week later, when the stock was just above $7. As you can see from the chart below, TRGL went on quite a run from there, though it has since pulled back from its high earlier this year.

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As of its closing price Wednesday, TRGL was trading at 12.29x its trailing 12-month sales.

Short Screen shows an Altman Z"-Score of 1.03 for TRGL (recall that Z"-Scores below 1.1 indicate financial distress, according to the model).

Audit Integrity rates TRGL as having "aggressive" accounting and governance risk (AGR), placing it in the 15th percentile (i.e., it has higher accounting and governance risk than 85% of the 8,000 companies Audit Integrity rates).

I plan on using a trailing stop here, in the event TRGL shares again buck the company's seemingly weak fundamentals and go on another run.

Imperial Oil, Ltd. (NYSEMKT:IMO), an Exxon Mobil (NYSE:XOM) subsidiary in Canada, isn't a pure-play E&P. Like its parent company, in addition to its exploration and production ("upstream") operations, it also has downstream and chemical operations. Still, as with its parent, the bulk of IMO's earnings come from its upstream operations: 71% of IMO's earnings came from upstream operations in 2010.

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As of its closing price Wednesday, IMO was trading at 1.8x its trailing 12-month sales.

Short Screen shows an Altman Z-Score of 5.24 for IMO (recall that Z-Scores of 3 and above indicate financial strength). A quick note about why Short Screen shows a Z-Score for IMO, and not a Z"-Score, as it does for TRGL: Short Screen uses Standard Industrial Classification (SIC) codes to class and categorize a company as manufacturing or non-manufacturing. Companies in SIC codes 2000-3990 are considered manufacturing companies. Although only a minority of IMO's earnings come from its refining business (part of its "downstream" operations), the company's SIC code is 2911 (Petroleum Refining).

Audit Integrity rates IMO as having "average" accounting and governance risk (AGR), placing it in the 40th percentile (i.e., it has higher accounting and governance risk than 60% of the 8,000 companies Audit Integrity rates).

I plan on using a trailing stop on IMO as well.

Source: Market Neutral Oil Company Trade: Long Imperial Oil, Short Toreador Resources