Trade Alert – Two new positions and revisiting an old favorite

Howdy y’all and welcome back to the ranch where the bulls get branded and the bears get shot and only the rancher’s spoilt children enjoy life.

I’m buying a bit of FutureFuel common, as noted the other day –

FutureFuel Corp. engages in the manufacture and sale of diversified chemicals and bio-based products in the United States. The company operates in two segments, Chemicals and Biofuels.

FutureFuel is a producer of biodiesel. The production facilities in the Midwestern U.S. produce both biodiesel and specialty petroleum products derived from biodiesel. It is also developing methods to convert cellulosic biomass (woody plant matter) into biodiesel. Biodiesel is a good alternative fuel option because it is producible from a wide range of agricultural and industrial feedstock, including waste lipids (e.g. bacon fat), and algae; it has a wide range of end-uses including the production of petroleum-based chemicals and liquid fuel and it can be used as a complete substitute for diesel in any diesel-burning engine.

The company has weathered some declines in its chemicals business but the outlook for biodiesel is strong and with $4.37 per share in cash, the business is selling for just 7.9x future earnings.  It also pays a dividend of 3.3%.

I’m also buying some Nuance common stock here. Been a long time since we’ve bought any Nuance and it’s been a tiny position since we trimmed most of our long at higher levels. I’m thinking it’s probably time to start scaling back into this one.

Also, I’m nibbling a small trading position in MRVL common stock and few calls dated out into March or later with strikes about $10 or so. Those calls are very risky and I’m committing very little capital to this trade, but if the stock can continue to find its footing it can get back above $10 in a hurry and I’ll look to sell the entire position.

Stay focused, as we have 35% of the trading week and 95% of the trading year and 99% of our trading lifetimes ahead of us still.