I have been very tempted to start building positions in some micro-cap oils that have been knocked down, but I fear it is a little too soon, as the oil plunge may last for an extended period. However I have started to look again at my old favorite ESTE, as after the merger with Oak Valley, the combined company will have no debt and $7.00 to $8.00 in cash per share, if the numbers presented are accurate (and Earthstone's small debt - about $7MM - will be paid off). So I have bought a few shares as the stock price has tanked to the $15 area.
As a hedge, I have also started to short the shares of two North Dakota based companies which I feel will be greatly impacted by low oil prices (permits and new drilling activity will soon cease and layoffs should mount in the state). The two stocks are BNCC - a bank with 67% of their loan portfolio with North Dakota exposure, and IRET - a Real Estate Investment Trust also with heavy concentration in areas of the oil patch (they own both residential apartments and commercial buildings).
As a hedge, I have also started to short the shares of two North Dakota based companies which I feel will be greatly impacted by low oil prices (permits and new drilling activity will soon cease and layoffs should mount in the state). The two stocks are BNCC - a bank with 67% of their loan portfolio with North Dakota exposure, and IRET - a Real Estate Investment Trust also with heavy concentration in areas of the oil patch (they own both residential apartments and commercial buildings).
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