Vermilion (VET)* $19.70 was added to the LOTM: Ten under $10 for the Double on February 4, 2021, at a price of $5.49. A second unit was added to the Ten Under $10 on July 20, 2021, at the price of $6.51. Both units remain in the portfolio.
On March 2, 2022, Zacks had a nice comment on VET about the potential for an earnings beat linked here. We like the shares (still) but we could be in a buy the rumor sell the news position.
We are comfortable owning the shares but tend to hold our winners rather than add more at this price without a correction. We try ride the winners as long as we can, scaling out along the ride.
Zacks rates VET #1 (best) on its 1 to 5 scale.
VET is still trading at about 5 times this year’s earnings estimate. Who knows where the price of oil could go. Very credible people are talking $200 to $250 a barrel. If the price of oil stays around $90 to $100, VET will make a fortune. VET was trading at $2.30 as recently as October 2020. They have initiated a dividend, could pay a special dividend and might even do a share buy-back program, in addition to paying down debt. All has been discussed publicly with the caveat of, “Let’s see how cash flow builds.”
No harm in scalping some profits going into earnings, however we still have VET as a hold and enjoy the ride. We like other ideas better for establishing new buys. We try to let our winners run. It’s hard to catch a “runner” so when we do catch a runner, we fight our emotional impulse to sell as best we can. This is a tough game to be a perfectionist, so work with probabilities and scale in and scale out as a good habit.
LOTM Research & Consulting Service
* An account related to LOTM holds a position in this security.
Neither LOTM nor Tom Linzmeier is a Registered Investment Advisor.
Please refer to our web site for full disclosure at www.LivingOffTheMarket.com ZTA Capital Group, Inc.
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