S&P LOWERS OPINION ON SHARES OF HOLLYFRONTIER TO HOLD FROM STRONG BUY (Standard & Poor's) Our downgrade is based on valuation, as shares have increased more than 40% year to date. We continue to have a favorable view of the company as we believe it will benefit from its strategic locations. We also are positive on the high complexity ratings for each of its refineries, enabling them to process heavy and sour crudes. We maintain our '11 EPS estimate of $6.62 and our '12 EPS estimate of $5.72. We also keep our 12-month target price of $35, based on a multiple of 3.2X enterprise value to our 2012 EBITDA forecast, lower than the peer average.
Also CVI just announced a reg divvy + an as yet to be determined special divvy.
Given the projected cash generation of our refining business, the distributions we receive from our ownership in CVR Partners and our strong financial position, our Board determined after careful review of all its strategic options that it was appropriate to return a meaningful amount of cash to our shareholders. We intend to introduce a regular quarterly cash dividend that is in-line with our refining peers and a special dividend funded from the sale of a portion of our interest in CVR Partners," said Jack Lipinski, chief executive officer of CVR Energy. "We are proud of our performance, confident in our prospects and look forward to continuing our long-term strategy of providing outstanding returns for our shareholders."
Several months ago GS had HFC on its preferred list + WNR a buy, they then reversed it. Now several months later, they reversed it again.
Jana sold 25% of its MPC at ~42/share + pocketed 44MM + have options to buy another ~850K shares at 27.50/share. Icahn the perennial raider who has pocketed a ton on CVI, up 23%, has told the BOD to sell the company. These hedge funds need massive regulation as they manipulate the markets to their own benefit as the retail investor can only hope they are in the stock the raiders have positions. Right now they have targeted the refiner sector + they will put a lot of pressure on these firms to return shareholder value, ie, more money in their pocket and who cares what happens to the company next week as long as they hit their profits this week. If they leave the company in shambles they could care less as their wallets bulge.
Sometimes it a good thing as it pushes poor BOD's into making decisions they would never make on their own that may benefit the company but far too often its to the detriment of the company.