Here are some warrants that I'm following:
1. Telecoms: XO Communications (XOCM.OB) has 3 warrants (XOCML.OB, XOCMW.OB, and XOCMZ.OB). All 3 expire in Jan. 2010. The L's have a $10 strike price, the Z's a $7.50 strike, and the W's a $6.25 strike. All 3 soared in Jan. 2004, spiked nicely, then fell flat. All 3 have recently bottomed out, it appears. Carl Icahn is the majority shareholder of XOCM, post-bankruptcy, and these warrants have 5 years to run. I prefer the W's and the Z's. McLeod (MCLD) has MCLDW.OB warrants that soared in recent days. McLeod also went through a bankruptcy and has struggled mightily. I hold neither MCLDW.OB nor any XOCM warrants currently.
2. Montana Mills warrants (MMX_WS): these Amex-traded warrants expire on 6/27/07. Somewhat complicated conversion formula here. One warrant essentially gives you the right to buy 1 share of Krispy Kreme Doughnuts (KKD) at about $51 per share. KKD has been a disaster lately but might go places if senior management is shown the door. The MMX_WS warrants traded around $1.40 in 2003. They currently have a bid/ask of .03/.08. I picked up warrants recently at 3 cents and 6 cents. KKD is trading around $11.50 after falling to the high $9 range. That strike price is very far away but the shares did trade at $47 in 2003 and the warrants have 2.5 years to go. Certainly a lotto ticket here. If KKD rebounded to $20 within a few months, these warrants might very well double or triple from current levels. Once again, I believe that KKD and these warrants could be a sleeper if top management is axed and a new team enters the picture.
3. Magnum Hunter Warrants "A" (MHR_WSA). Warrants offer the right to buy 1 share at $15.00 until 3/21/05. Company is on the auction block and is pursuing "strategic alternatives" via two investment bankers. Press release due from company by 12/31/04. Share price is at $12.87 and warrants trading in the 31-44 cent range in recent days. Trailing P/E of about 10-11 for 2004 estimated earnings. Forward P/E based on 2005 estimated earnings is even lower. Warrants (non-callable) could either expire worthless, explode in price, or perhaps perform in-between. Raymond James has pegged the "proven net asset value" at $16.51 as of 12/13/04. Question is what value the shares might bring if the company is sold piecemeal or in full. I have a position in these Amex-traded warrants.
4. Air France KLM warrants (AKH_WS): I believe the exercise price is 20 Euros and the expiry is sometime in 2008. Trying to find more details. This is a profitable airline and the warrants (at $1.10 currently) could soar if jet fuel decreases significantly in price and the US dollar becomes notably stronger against the Euro. These warrants are traded on the NYSE. I'm not a warrant holder here. |
