Dykstra's Deep-in-the-Money Call: Tesoro

The refiner's been beaten down, but the January calls could help investors retaliate.
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Scoreboard watching is common this time of year for hockey and basketball pros.

Last night it was the Montreal Canadiensturn to keep their eyes glued to the tube. The Habs' had to wait through a tight Game 7 between the Philadelphia Flyers and Washington Capitals to determine their next opponent in the quest for the Stanley Cup.

The Flyers scored an overtime 3-2 victory over the Washington Capitals, who had trailed the best-of-seven series 3-1 but had clawed their way back into the fight to force a game 7. Joffrey Lupul buried a rebound at 6:06 into overtime to send the Flyers to the second round.

For readers of this column, the gratification isn't always as quick. While my picks sometimes score wins quickly, other picks take time to turn our way. The season's still young, but we've grabbed wins with

Boeing

(BA) - Get Report

,

Dow Chemical

(DOW) - Get Report

,

Sigma Designs

(SIGM)

and

Garmin

(GRMN) - Get Report

for a total of $4,000. Other positions remain open.

And for today's pick. I'm going with

Tesoro

(TSO)

Tesoro produces refined products, including gasoline, jet and diesel fuels for sale to commercial customers. It also sells gas and diesel fuel through its retail segment.

The stock got absolutely slammed Tuesday, shedding 5.4% during regular-session trading. It closed at $26.82, slightly above its 52-week low of $25.06 a share and miles below its 52-week high of nearly $66. The stock is down 40.57% this year alone.

Refiners have been feeling the pain lately and are operating at their lowest levels since shortly after Hurricane Katrina in 2005 when natural disasters disrupted the industry. Part of my strategy is to find stocks that have been unfairly beat up by the Street and I think Tesoro fits that bill.

That's why I am going all the way out to January 2009 with this order for 10 contracts. I will place a limit order at $12.80 for the Tesoro DITM calls using the $15.00 (ZGCAC) strike price. Once the order is filled, make sure to place a sell order at $1.00 higher.

Always Remember: Life is a journey, enjoy the ride!

At the time of publication, Dykstra had no positions in stocks mentioned.

Nicknamed 'Nails' for his tough style of play, Lenny is a former Major League Baseball player for the 1986 World Champions, New York Mets and the 1993 National League Champions, Philadelphia Phillies. A three time All-Star as a ballplayer, Lenny now serves as president for several privately held businesses in Southern California. He is the founder of The Players Club; it has been his desire to give back to the sport that gave him early successes in life by teaching athletes how to invest and protect their incomes. He currently manages his own portfolio and writes an investment strategy column for TheStreet.com, and is featured regularly on CNBC and other cable news shows. Lenny was selected as OverTime Magazine's 2006-2007 "Entrepreneur of the Year."