Wednesday, September 26, 2012

Back in Nexen, Inc.

I nibbled back into Nexen, Inc. (Ticker: NXY) today at $25.15. This position currently makes up ~ 6% of my portfolio. The risk reward appears favorable as I see the likelihood of this deal closing very high, but again the question is when will it close? A Q4 close would generate an annualized return of ~ 34% whereas a Q1, 2013 close would generate an annualized return of ~ 18%. Of course, I would prefer the Q4 close… Cnooc Ltd. (Ticker: CEO) is currently in the market for a $6 billion loan and they are anticipating a Q4 close. At the end of the day, both sides will benefit from this deal as Canada needs investment to develop their natural resources and Cnooc is looking for more oil.

Edit: I sold out of my Nexen position at $25.19. I'll continue to scalp this one in this market environment.


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