AirMedia Group (AMCN): Long ahead of earnings. Second derivatives plays on China are extremely hot right now, and AirMedia Group should be no exception once it reports earnings this week. As intermodal travel picks up in China domestically, companies like AirMedia (AMCN) are poised to capture the recent increase in domestic traveling. Just recently AirMedia signed an advertising agreement with Sinopec Corp—one of China’s largest exploration and production oil and natural gas companies. According to the licensing agreement, AirMedia will install its digital TV screens in up to 1,000 Sinopec gas stations this year, and plans to have a nationwide network in 8,000 service stations by 2015. Currently AirMedia reaches more than 4/5ths of all Chinese air passengers thru its network of 2,500 digital TV screens across more than 40 national airports. Air travel companies like Ctrip.com (CTRP) have recently reported impressive quarter over quarter, as well as year-over-year increases, which is also another catalyst for the stock going forward.

PetSmart Inc. (PETM): Short ahead of earnings. Despite solid earnings from PetMed Express (PETS), Petsmart (PETM) operates as a standard retailer who is subject to the typical consumer headwinds which has crippled the sector recently. PetSmart only has $126 million dollars in cash, but over $630 million dollars in debt (6-1 debt to cash ratio) as debt in the capital structure represents almost 20% of the company.

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ATP Oil & Gas Corp (ATPG): Long ATP Oil & Gas (ATPG), is an independent oil and gas company with its principal assets based in the Gulf of Mexico and the North Sea (UK waters) ATP is sitting on its 52-week low list ($3.49), down a whopping 90% for the year from its all-time high of $58 per share reached back on November 1st 2007. ATP is trading with a forward P/E of 4.47 and EV/EBITDA of 2.684. From 2005 to 2007 ATP has seen a compound annual growth rate (CAGR) of 79%, as its natural gas reveres have gone from 20 billion of cubic feet equivalent (Bcfe) to a whopping 64 billion of cubic feet equivalent. Recently, ATP sold a 10% stake in its Gomez Hub for $82 million dollars. This percentage sold comprises of 0.8% of ATP’s proved reserves and 0.5% of ATP’s proved and probable reserves. Thus, it is safe to deduce that ATP’s proved reserves are worth about $10.250Billion, and given ATP’s 98% success rate in converting non-producing properties to producing status, proved and probable reserves could be worth north of $15 billion. Let’s go to the operations: Production has gone from 1MBoe/d in 1997 to 12 MBoe/d in 2002 to 38.5 MBoe/d in 2008--As proved reserves went from 12MMboe in 97’ to 40 MBoe/d in 2002 to 110 MBoe/d in 2007. The bulk of their reserves are broken down into 2 main areas: the North Sea and Gulf of Mexico, with their principal assets focused in the following hubs (please note, these are internal names) “Cheviot” 22%, “Telemark Hub” 22%, “Gomez” 15%, “Tors” 11%,“GOM Shelf” 11%, “Canyon Express” 10%, and Other 9%. Important Operating Statistics: Production (MMBoe) has gone up 186% from 2004 to 2007. Revenue ($MM) went from $116MM in 2004 to $608MM in 2007, a 424% increase. EBITDAX ($MM) went from $79MM in 2004 to $511MM in 2007, a 543% increase. Discretionary cash flow ($MM), went from $57MM in 2004 to $382MM in 2007, a 578% increase. Production growth is up 31% year over year and even faster growth is projected in the future. Management currently owns north of 22% of the company they tend to be bullish on the company’s outlook during the conference call. There have been some concerns regarding the amount of debt within ATPG’s capital structure ($1.2 billion) but $1.05 billion is due in 2014. They paid back $274 million of a $550 million dollar agreement, leaving ATPG with $327 million to pay in 2011.

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