Tuesday, December 22, 2015
Window Dressing or Not; Oil Stocks Up Today
The end of the year is often referred to as "Window Dressing" time among traders. Portfolio managers add beaten-down equities of quality companies to their portfolios. The thinking is that they can say that these companies are in their portfolios when it's time to create a prospectus or talk about quarterly results. If in January they feel the stocks are going nowhere the portfolio managers can always dump them, but if they're recovering then it's time to let them ride to higher prices!
Solar City (SCTY) rocketed 34% to nearly $60 a share Wednesday when Elon Musk, he of Tesla fame, announced he was buying a majority of the solar panel maker. As mentioned previously by this blog, Solar City is owned and founded by two of Musk's cousins. Our target remains $90. It may be ambitious to think we'll see that in 2016, but for now we'll stand by that number. SCTY is trading around $52.50 today, down 6.4% for the day but up from the hellish depths it reached at $24 around Halloween.
Oil giants Schlumberger (SLB) and Chevron (CVX) are no doubt getting a boost in part from this window dressing phenomenon. The Baker Hughes American and Canadian drilling rig count actually went up by 17 rigs on Friday, the first rise in months. Some investors may feel this is the uptick from the bottom as oil companies have cut as far as they want to (or can) cut. In any event, oil is up slightly about 1% today and SLB is up 2.25% at $69.50 and CVX is 1.27% higher at $90.36 at 10 am.
Btw, U.S. regulators are seeking more concessions in the proposed merger between Baker Hughes and Halliburton.
Happy Holidays, Merry Christmas! Let's all be thankful for this 6-year bull market that has the Dow over 17,000. May the New Year 2016 bring more of the same for the Bulls, or as I like to call us, the good boys and girls! As for you naughty Bears, be patient. History tells us inevitably your time will come.