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  • Is Statoil (STO) A Good Hedge Against A Declining Dollar?

    I found two contrary arguments about whether Statoil ($STO) is a hedge against the decline of the US dollar.

    First, there is the argument made here:

    I believe Statoil is a great hedge against future USD weakness.

    Then there is the counterargument made here:

    Most of Statoil's revenue is made in terms of the U.S. dollar, which is used to price the global oil market. However, most of Statoil's costs are paid with the Norwegian kroner. Thus, a decrease in the value of the dollar against the kroner can adversely affect earnings. Because revenue will decrease and costs will increase relative to each other. Conversely, an increase in the strength of the dollar versus the kroner will benefit profits.

    So what do you all think? Which is it?

    Disclosure: I am long STO.

    Additional disclosure: Considering selling my STO position.

    Jan 21 8:44 PM | Link | 1 Comment
  • Revett Minerals Provides Update On Troy Mine

    "Since the suspension of underground activities in December 2012, Revett has ... undertaken efforts to identify a viable and safe route back into the previously established mining areas. ...Yesterday afternoon, our operating team, along with our geotechnical consultant and an MSHA representative were able to inspect an area extending approximately 400 feet south of the D Drive to current water levels. Initial observationsreveal safe travel conditions to this point.

    ... If assessments and inspections continue to indicate no further structural damage at the Lower Quartzite level, then theCompany could possibly resume mining operations as early as the fourth quarter of 2013.

    ... We remain cautiously optimistic that the remainder of this access route will meet our standards of safety, but we cannot be categorically sure until all inspections are complete. ...

    Disclosure: I am long RVM.

    Tags: RVM
    Sep 05 2:10 PM | Link | Comment!
  • Insiders Consistently Sell AMZN Shares And Rarely Purchase Shares

    There are plenty of posts about the valuation of Amazon (NASDAQ:AMZN), many arguing the stock is tremendously overvalued and poised to collapse, and many defending the lofty valuation on the belief that future growth justifies the exorbitant multiples. I have often used insider buying and selling as a validation before acting on stock ideas, so I consulted the insider trading history of AMZN to see if insider sentiment would be an indicator as to which argument is right. The result is unequivocal: insiders have not demonstrated much faith in the company's stock.

    The last open market insider purchase of AMZN was by Jonathan Rubinstein, a director, who bought 68 shares at $177.23 for $12,052 back in January 2012. Since then insiders have sold 1,243,674 shares for $310,399,460. Looking back further, it seems this is not just a recent phenomenon. Since May 26, 2004, insiders have purchased shares of Amazon on the open market only 5 times, investing a total of $264,388 of their own money. Over the same period, insiders sold shares 886 times, netting $2,292,189,262 - over two Billion dollars worth of stock! That's a ratio of 8700:1 in dollar value of sales to purchases.

    One can argue that insider selling is not an indicator that the stock will decline. After all, during this period of heavy insider selling, the price of AMZN shares has steadily increased. Regardless, I like to see insiders showing confidence in their company before I put my own money at risk. Insiders sell for lots of reasons, but they buy shares for one reason only, and that's to make money and in the belief that the shares are going to provide a healthy return on their investment. Clearly, Amazon insiders have not demonstrated such faith in the shares of their company.

    The source of my information on insider trading was

    Disclosure: I am short AMZN.

    Additional disclosure: I am long AMZN put options with strike $420.00 and expiration January 2015.

    Tags: AMZN
    Mar 21 2:25 PM | Link | 2 Comments
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