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HollyFrontier Corporation Message Board

  • ah673000 Jun 4, 2013 9:16 AM Flag

    Question ...

    Refiner A will make $ 5.72/ share in 2014
    Refiner B will make $ 5.49 / share in 2014

    Refiner A stock sells for 20% less then refiner B today.

    Which refiner stock will appreciate the most by January 1, 2014.

    Who ever invests today on this data will gain 20% over those who ignore this data .

    Own both, but migrating core holdings to refiner A since January when refiner B shares were valued at 50% more then refiner B stock.

    I am always amazed when people who hold stocks choose to ignore refiner profit data ... Because the MMs do not.


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    • a) Analysts can't even get their estimate right for the next Q let alone the next year.
      B) most analyst haven't factored in on going expansion at Refinery A facility into 2014
      C) refiner A has 20% of its market cap in net cash
      D) refiner A has a 6% yield, refiner B has a 2.8% yield
      E) refiner A has the highest gross margin per bbl refineries in the nation

      I agree, own both. Because if the WTI vs Brent spread kicks back up, that favors HFC more than VLO.

      Sentiment: Buy

      • 1 Reply to ewienert
      • With all due respect, the Brent vs WTI spread is a relic of the past, and doesn't apply to any real-world situation. There is no case in the USA where a refiner running Brent sells into the same market area as one running WTI. LLS vs WTI has some relevance, but noone talks about it.

        The discounts that matter to both HFC and VLO profitabilty are the various heavy/sour discounts. HFC discuss it in every conference call yet it seems to fall on deaf ears on this board. And those discounts have really slimmed down, and in some cases, disappeared, this year. I don't find either refiner a compelling buy right now. HFC will hover in this area due to the big divvy payout. VLO, I don't know, I just see nothing that excites me. Every rally in both stocks is being sold into. I still have HFC shares but have sold most of my position in the last 7-8 months and am playing with the house money, so to speak, just collecting the divvy.

        The oil bulls keep trying to run up inland light crudes but new supply always takes up the slack. The big added refining capacity in the midwest is all geared toward running Canadian heavies, that keeps a lid on WTI and the heavy discount at the same time. So I just see lots of volatility in the 46-51 range for HFC stock.

    • C'mon, dude. Do you really expect such a simplistic "analysis" to be taken seriously?

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