Energy and Capital editor Christian DeHaemer makes 179% while hedges funds go bankrupt... Here are some of his top plays for the coming winter season.
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Catastrophic Trade
[Christian DeHaemer Photo] By [Christian DeHaemer](
Written Nov. 20, 2018
Yesterday every sector was down, including most commodities. One sector that bucked the trend was orange juice.
As I write this, my wife is home sick with a brutal cold, or maybe it's the flu — who knows? But one thing I had to pick up from Giant along with tomato soup (Campbell's, NYSE: CPB) and Theraflu (GlaxoSmithKline plc, NYSE: GSK) was their fresh-squeezed OJ, which sells for over 10 bucks a pop.
It looks like the cold weather we are having here in the Northeast is going to continue. They are predicting that Thanksgiving will have temperatures 15 to 25 degrees below normal.
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Up 179% on UGAZ
Last week I told you how we made 179% from a 3x natural gas play in my trading service Crisis and Opportunity. It then sold off most of its gains, but now it is back. It's been incredibly volatile this week. UGAZ was up 20% yesterday alone.
This volatility was caused not only by the lack of natural gas in storage coupled with an early winter storm, but also due to a huge short position.
Why anyone would be short winter is beyond me, but it happened. Natural gas prices moved so high, so fast that it destroyed the shorts and sent at least one hedge fund to the bone yard.
Here is a note one hedge fund, OptionSellers.com, sent out:
Image to Enlarge
The options fund not only blew all its money, but it also now has a debit. If you invested with this firm, you’d be out all your money plus some...
There is nothing like being on the right side of a big winner like Crisis and Opportunity — unless it's when you get to take out some hedge fund with bad ideas at the same time.
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Let it Snow
This got me thinking of other winter stock trades.
There is Vail Resorts (NYSE: MTN), the owner of ski resorts that loves a snowy winter. But then again, after a five-year run up, it isn’t cheap, with a PEG ratio of 9.18 and a forward P/E of 29.
Public Service Enterprise Group (NYSE: PEG) is an electric and gas utility in the Northeast. That could be a solid safe buy.
V.F. Corp. (NYSE: VFC) makes North Face and Timberland brands of winter gear. But the chart seems a little toppy. And the North Face fad is fading out.
Toro (NYSE: TTC) makes snow blowers. The value is a bit high at nine times book. Also the slowdown in housing doesn't bode well for Toro’s growth.
Douglas Dynamics (NYSE: PLOW) outfits commercial snow removal vehicles. PLOW looks to be the best of the bunch. It has a P/E of 13 and a PEG ratio of 1.27. It also pays a 2.82% dividend.
Another winter trade is coal.
Coal prices are soaring. They have almost doubled since 2016, going from $40 a ton to $78.
FocusEconomics is reporting:
Fourth-quarter Pacific basin thermal coal prices will likely average 8% more than forecast last month, due to the prospect of strong Chinese demand and limited Australian output.
It estimated Asia-Pacific benchmark Newcastle prices to average USD 105/t in October-December, up from a forecast of USD 97/t a month ago but still 6% lower than the latest Global Coal index price of USD 112.09/t.
I’ve found one coal miner that is exporting to Asia and pays a 10.53% dividend. [Check it out here.](
All my best,
[Christian DeHaemer Signature]
Christian DeHaemer
[[follow basic]@TheDailyHammer on Twitter](
Since 1995, Christian DeHaemer has specialized in frontier market opportunities. He has traveled extensively and invested in places as varied as Cuba, Mongolia, and Kenya. Chris believes the best way to make money is to get there first with the most. Christian is the founder of [Crisis & Opportunity]( and Managing Director of [Wealth Daily](. He is also a contributor for [Energy & Capital.]( For more on Christian, see his editor's [page.](
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