Dykstra: Around the Horn of Plenty

And yet, Frontier Oil is trading about 25% below its 52-week high of $46.18.

What is the best way to start a position in Frontier Oil? I am recommending two ways: The first is to just buy the stock right here at Friday's close of $34.28, while setting a stop loss 5% below your purchase price. The reason I am not giving you an exact price where to set your stop loss is because Frontier Oil is below all of its major moving averages. Not to worry, with its earnings growth, if you get a chance to buy more at a lower price, I would add to your position instead of sell. I would look to take your profit anywhere near the 50-day moving average, which is just above $38.00.

The second way to take a position in Frontier Oil would be to buy a deep-in-the-money call. The option I recommend is an April $22.50 call, for approximately $12.70. This way, you only need to come up with $12,700, as opposed to $34,280 dollars to control 1,000 shares of Frontier all the way until the third Friday in April, April 21. I have a buy order in to do just that Monday morning.

My second pick is another example of my philosophy of buying quality companies at a discount. Dell (DELL Quote) is definitely a quality company and its stock is definitely being sold at a discount.

With a forward P/E of 16.77, a return on equity at an unbelievable 60.31%, free cash flow at $3.33 billion and almost zero debt, this is a company you definitely want to own, especially at this discounted price. Because the name "Dell" speaks for itself, I will jump right into how I would (and will) acquire this stock.