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Compiling comments that experts make about stocks while on public TV.

Viewing Expert

Richard Croft , President

R.N. Croft Financial Group Inc.

Address
218 Steeles Ave East
Thornhill, ON
L3T 1A6

Contact Info
Telephone: (905) 695-7777
Toll Free: 1-877-249-2884
Fax: (905) 695-9777
Email:
Website: http://www.croftgroup.com/index.htm

Bio:

R. N. Croft Financial Group Inc. is a boutique portfolio management company, providing fully customized discretionary asset management to discriminating investors. Our investment approach combines low cost tax-efficient indexed investment strategies, with targeted active management, and sophisticated options techniques to maximize client returns at any risk level. Our portfolio processes are unique, flexible and comprehensive.

Date Signal Chart Symbol Company Opinion Price
2015-12-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Markets. Most people don’t have a way of quantifying risk. They understand return metrics, but don’t understand risk metrics. The volatility in the market is evidence of what risk is all about. We only look at risk from the perspective of downside risk, and we are looking at it when the market goes down. Nobody really has a problem when the market rises substantially and quickly. There was a significant drop in oil beginning in the 4th quarter of last year. That decline was so rampant it paid a dividend at the gas pump because you had more money to spend. In theory consumer should spend that dividend. If they spent that dividend then the decline in oil prices, offset by the rise in consumer spending, should be a wash for Canada and net positive for countries like the US. This time we didn’t see that, and Canada went into a technical recession risk. Thinks the market declined so rapidly that investors/consumers didn’t believe it. As it dragged on consumers began to believe that it was almost a permanent thing and is going to be here for a while. In that light you are starting to see consumers spending a little bit again. We are starting to see that in credit card numbers. If he is right, you should see those spending patterns pick up in discretionary items like restaurants. Restaurant sales at the tail end of August and beginning of September were up 18%. This leads him to think that we may actually see some positive stuff next year, and that will be a surprise to the upside.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
_N/A
2015-12-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

A natural gas ETF to hold for the next 3 years? Not sure he would be going Long natural gas. There are a number of ETF’s. If you just Google “natural gas ETF’s”, you will get probably 10 or 20 of them.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
_N/A
2015-12-10 N/A Must be logged in to use chart A Commentary A Comment -- General Comments From an Expert

Oil? We are awash in supply, and that is not going to end any time soon. Suppliers out of the Middle East are going to continue pumping because they want to maintain market share, and hopefully affect a lot of the fracing companies in the US, but more importantly they have significant domestic issues that they can only tap down on by continuing to produce oil and continue to flow money into their systems.


Price:
$0.020
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
_N/A
2015-12-10 PAST TOP PICK Must be logged in to use chart CNQ-T Canadian Natural Rsrcs

(A Top Pick June 29/15. Down 7.29%.) Covered Call. It was a very high implied volatility on the options on this. Had bought the stock at $34 and sold a $34 Call for $3, so his net cost on the stock is $31. If you have this, he would just leave it. The option is going to expire in January and he would write another 6 month option, because you are going to get another $3 in January, which will reduce your cost.


Price:
$29.960
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
Yes
2015-12-10 COMMENT Must be logged in to use chart CNR-T Canadian National R.R.

If you don’t think oil is going to be surging higher, this is a really great place to be. If you are looking at this based on what is going on in the market right now, which will probably last anywhere from 3 to 6 months, he would consider buying a Call Option. It gives you leverage and exposure to a very good railway company, and there is a lot of interest in this space right now. He would do a $74 Strike 6 months out.


Price:
$73.500
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
Unknown
2015-12-10 COMMENT Must be logged in to use chart CPD-T iShares S&P/TSX Preferred ETF

If you think interest rates in Canada are going to stay where they are or rise ever so slightly, then this is probably near the low because he believes that is what has been priced into it. He would prefer Premium Income Corporation (PIC.PR.D-T), which is a 6% yield, $15 per share unit. This is like a deep in the money covered call. If interest rates rise, that will be positive for the banks, which means there is very little downside in this product.


Price:
$11.985
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
Unknown
2015-12-10 COMMENT Must be logged in to use chart DH-T DH Corporation

Has a Put option for Dec $34, and the short Sellers drove it down. Normally would roll this over to the next month, maybe Jan $32, but thinking he will let the stock be Put to him and Selling a Call 6 months from now. Answer: The caller sold a Put Option on the stock, which is a very steady interesting cash flow business. When selling a Put, you are taking an obligation to buy the stock. In this case he sold a $34 Put and was saying that he was willing to buy the stock at $34 a share until the Put expires this month. It is trading below $34, so he is going to be Put the stock and is going to own it. Because he now owns the stock he is asking if he should Sell a Call option that gives him the obligation to deliver his shares to the person who bought the option, at probably a $34 Strike Price. This is a fine strategy.


Price:
$31.470
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
Unknown
2015-12-10 COMMENT Must be logged in to use chart DXGE-Q WisdomTree Germany Hedged Equity Fund

This is hedged back to the US$. The German market is priced in Euros. Because Europe is doing such a large quantitative easing,, the investments over there are priced in Euros, and there is a good chance their euro will decline against the US$, and this one hedges away that risk. The only thing you got here is exposure to the German market, and they are the leading economy in the euro zone. This is a great investment and you will do fine with it next year.


Price:
$27.500
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
Unknown
2015-12-10 TOP PICK Must be logged in to use chart FB-Q Facebook

Bull Call Spread. On this you buy a Call and sell another call at a higher strike price. On this, you are paying out to Buy it, and ideally you want the stock to rise above the higher strike price. As it rises above that you make the maximum. If he is right, there is about a 200% upside.


Price:
$105.420
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
Yes
2015-12-10 COMMENT Must be logged in to use chart HEF-T Horizons Enhan. Incm. Fin. ETF

Current yield is about 8.5%. This owns a basket of financial stocks and is basically writing Covered Calls against them. If the prospectus says they are writing options against most of the portfolio, i.e., 80% or more, he would have a problem with it because if he is correct, you get capped on the upside. Markets have been relatively choppy, so you could have the financials go up and come back. You are capped on the upside, it’s dropped down, and they are writing Calls below the strike price, and this could create some losses in the portfolio. He would prefer BMO Covered Call Canadian Banks (ZWB-T).


Price:
$8.140
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
Unknown
2015-12-10 TOP PICK Must be logged in to use chart NFLX-Q Netflix Inc.

Bull Put Spread. Sell a Put where the stock is now, which obligates you to buy it, and Buy a Put at a lower strike price just to hedge your position. He thinks this stock will be higher next year, because the momentum stocks on the tech side and/or the banks are going to be the real leaders next year. Those are 2 places to be. On this you should be able to retain about $4 in premium.


Price:
$122.910
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
No
2015-12-10 TOP PICK Must be logged in to use chart TD-T Toronto Dominion

Buy a Call. Believes the banks are probably going to lead next year. This one has not had a good year, and thinks this is the best positioned in Canadian banks in terms of their US exposure. Buy a Call option at $54 out to January 2017.


Price:
$53.980
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
Yes
2015-12-10 COMMENT Must be logged in to use chart TD-T Toronto Dominion

Calculating the risk and using option pricing to determine the expected return? Let’s say the bank is $54. A $54 Call and a $54 Put. If you add these 2 together, it is about $4.20. Your trading range for the next 3 months is $49.80 up to $58.20. If you are comfortable with that kind of volatility over the next 3 months, this tells you what the expected return is.


Price:
$53.980
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
Unknown
2015-12-10 COMMENT Must be logged in to use chart UUP-N PowerShares DB U.S.$ Bull ETF

An ETF that would benefit from a drop in the US$? Would you buy a Call on it, and how far out would you go? This is one you could buy a Put Option on. He thinks the US$ is going to be stronger, so not a bet that he would make, but if he were doing that he would go out 6 months. Currency is a tough game to play.


Price:
$25.450
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
Unknown
2015-12-10 PAST TOP PICK Must be logged in to use chart XLV-N SPDR Health Care E.T.F.

(A Top Pick June 29/15. Down 3.4%.) Likes healthcare and wouldn’t sell this. Healthcare is one of those areas that is a good position to have in a portfolio.


Price:
$71.350
Subject:
OPTION STRATEGIES & E.T.F.S
Bias:
UNKNOWN
Owned:
Yes
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