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Western Refining, Inc. Message Board

  • motleyghoul motleyghoul Sep 29, 2011 2:03 PM Flag

    Why do we keep going down?

    Can anybody explain to me why WNR keeps going down? The chart pattern seems to indicate we're going lower too. Yet, WNR is on the Goldman Sachs buy list, has a low PE, etc. Can anyone explain this to me? Thanks.

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    • I think valuation of the refining assets may be an issue. Recently in 2011, there are about 6 or 7 refineries for sale on the east cost or have been sold, most recently in Wilmington. WNR has the Yorktown refinery on the books at $455 million , which is a 65,000 bpd refinery. Other refineries have sold for 200-250 million in 2011 which are twice this size. Plus there are announced sales and closings increasing in 2011 as well from a number of oil companies, ie BP, Marathon, Sunoco, Conoco, etc. All else equal, I think given the going market rates for refineries, they may need to take an asset writedown to reflect the true value of their refineries. WNR's book value is nearly 2x that of Tesoro, without any real explanation why. Valero and Tesoro have book values that are more in line with the industry averages it seems. The book value of WNR is about $8.50 or so, and even lower if the overstated refinery assets at Yorktown are properly priced......Their earnings were stupendous in Q2 but going forward crack spreads will get smaller as the economy contracts, same thing happened in 2008/2009.

    • I think the 'tutes are giving the shorts an opportunity to get out.

      If you look at the ownership stats it is obvious the shorts have borrowed their shares from the 'tutes (or are the 'tutes).
      Combine that with some timely Q3 window dressing and the result is a very attractive buying opportunity.

      My only concern is that the WTI/Brent spread needs to stay high for WNR to jump higher before earnings.

    • Do you have ANY PROOF that "WNR is on the Goldman Sachs buy list"? Please be very specific about the proof that Goldman Sachs "has recently bought/is buying/will be buying soon" this stock.

    • This is a bunch of BS as usual but we can thank those low life criminals at Morgan Stanley (who are lucky to still be in business) for today:

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