MidSouth Week in Review: Jun. 30 2015

Weekly Update from Fund Manager Buzz Heidtke, MidSouth Investment Fund

Jun. 30, 2015 | MidSouth Investor Fund

The Russell 2000 small cap index and the NASDAQ made new highs this week before retreating to their late April levels. Until the uncertainty of the Greek debt situation has been resolved, expect the markets to continue to tread aimlessly.

HCA gained $7.35 yesterday on news that the Supreme Court ruled in favor of the legality of Obamacare. On Wednesday, someone bought 4,080 HCA July 85 call options and sold a like amount at the 92.5 calls for a net cost of $1.95 or $795,000, and sold the next day at a spread of $4.70 and a one-day profit of approximately $1.12 million. Yesterday Humana rose $13.12, on a Bloomberg speculation of a takeout bid from Aetna.

Goldman Sachs believes the dollar will increase 20% against the Euro by 2017, which would push the Euro down to around 90 cents vs. the current price of $1.12. If Goldman is correct, expect the large multinationals, that sell to the European market to be hurt as well as seeing a weakness in commodity prices and oil. However, European vacations will be cheap, cheap, cheap.

"I work with many of the companies that would be RedChip companies. And we certainly ascribe to the same view that the RedChip Companies do, which is Discovering Tomorrow's Blue Chips Today."

  • Bob McCooey, Senior Vice President, NASDAQ Stock Market