Refiners on a tear, and no end is even remotely in sight given todays much larger than anticipated gasoline inventory drawdown. I am growing confident Valero could see 90. TSO is already at 109.
Everyday, VLO goes higher..I feel like an ASS now for selling.......all because of my impatience! . I guess the trend really is your friend, lol. (sigh) cm
Valero has a P/E of 7.8 and a P/S ratio of .08 even at $68. That is one incredible value given its earnings and profit margin. Cramer says to go with integrateds. Bolling says go with Tesoro and Valero. He also seems to be able to discern a nice chart, whereas Cramer does not. Bolling seems to know more about fundamentals than Cramer. Irrespective of either opinion, I'm letting Valero run. It would have to rise to approximately $92 to catch Tesoro or Alon's valuations. And Zack's couldn't be more bullish on Valero if they tried (while dissing Cramer's misinformation that integrateds are the way to go - I wonder if Cramer is operating from ulterior motive, again): Zacks Industry Rank Analysis Highlights: Frontier Oil, Sunoco, Valero, Western Refining and Acuity Brands CHICAGO, Apr 12, 2007 (BUSINESS WIRE) -- Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week's analysis Frontier Oil (FTO), Sunoco (SUN), Valero (VLO), Western Refining (WNR) and Acuity Brands (AYI). To see the Zacks Industry Rank and the trend in earnings estimates revisions for all 208 industry groups, visit http://at.zacks.com/?id=3154. Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com. Two weeks ago, I discussed rising earnings estimates for oil refining companies. The trend is continuing - within the past week, brokerage analysts have raised both first-quarter and full-year profit projections on Frontier Oil (FTO), Sunoco (SUN), Valero (VLO) and Western Refining (WNR). FTO, VLO and WNR are Zacks #1 Rank ("strong buy") stocks; SUN is a Zacks #3 Rank ("hold") stock. The cost of Texas Tea is staying in the mid-$60 range and comments out of some oil-producing countries suggest that they are happy with the current price levels. Gasoline inventories in the U.S. have fallen for eight consecutive weeks and another drop is anticipated when the Department of Energy releases its weekly survey later today. Prices at the pump are up 18 cents over the past two weeks and are now up by about 50 cents per gallon since the end of January. Then there is the ongoing problem with Iran and its intent to go nuclear. Refiners not only benefit from higher oil prices, but they are also in a favorable position from a supply/demand standpoint. Refineries in the U.S. are operating at almost full-utilization. Sustained economic growth results in more cars on the road due to both higher employment and more vacations. Combined, these factors are positives for companies whose earnings are dependant on the size of the margins they can command. Given this backdrop and the trend in earnings estimate revisions, companies within Oil Refining & Marketing could issue positive first-quarter earnings surprises. Valero intends to report on Apr 24 and brokerage analysts currently expect earnings of $1.62 per share (versus $1.58 last week). Sunoco intends to report on May 2 and brokerage analysts expect earnings of $1.24 per share (versus $1.22 last week). Frontier Oil and Western Refining will likely report in May, though neither company has announced a date.
3Stocks is currently rating VLO just 6 out of 10: http://www.3stocksonfire.com/video.stock.analysis.php?videoid=19&tag=VLO stock analysis