|Re: Oil and gas warrant plays|
Thanks for your kind words. I'm very much interested in your ideas and Rocky's on what you like in the warrants world. We three are the only ones chatting, so let's collectively try to keep this forum energized. Maybe some others will come on board and offer their ideas.
The great challenge is trying to identify good warrant plays before they make major moves rather than chasing them after the fact.
Agree that oil & gas warrants are much harder to come by. There were some really good ones in the past like Patina Oil & Gas, Magnum Hunter, and so forth.
Here's a oil driller play . Vantage Drilling (VTG) is at 1.90 and the VTG-WT warrants are at 8 cents. This one was once a "blank check company" then exited that stage. VTG shares got mauled by the huge downturn in commodity prices. Now it appears to be on the comeback trail. The VTG-WT warrant is the right to buy 1 share at $6 through 5/24/2011. Warrants are redeemable if shares trade above $11.50 for 20 trading days out of 30. I'm a member of the stockwarrants dot com subscription website so I communicate often with them often and they analyze warrant terms very thoroughly and they'll contact companies if in doubt. I trust their data.
VTG appears to have low sales (under $1M) and high total debt ($150M) at present, from what I read. That might be old data shown by Yahoo Finance. Need to look at it much further to see if the risk/reward appear favorable or not. For now, I'll take a pass on VTG-WT.