please, a 5 percent yield in a world that has no yield, a world where no new reineries are being built, selling at a 52 week low and is not over leverage like all the other refineries, the pe ratio is as low as it gets, maybe I'm missing something but it sure looks like a good play in an overextended market where values are pretty hard to come by. But hey, what do i know.
why you ask? Have you read over their last 10K, the risks section? It is a (not so) little shop of horrors. Major EPA sulfur and GHG cap ex, huge debt risk if margins get weak, Blackstone controls the company and does whatever is better for it at shareholder's expense, completely depends on a high Bakken/WCS spread to WTI and Brent, they depend on exporting diesel but global capacity is ramping up very soon, their biz model depends on acquisitions and more debt, etc. To discount all these (and more) major risks, many of which could lead to bankruptcy, price has to go much lower to make it worth a (Vegas) bet.
key excerpts below:
Our Toledo refinery is subject to interruptions of supply and distribution as a result of our reliance on pipelines
for transportation of crude oil and refined products.
Our Toledo refinery receives a substantial portion of its crude oil and delivers a portion of its refined products
through pipelines. The Enbridge system is our primary supply route for crude oil from Canada, the Bakken region and
Michigan, and supplies approximately 55% to 60% of the crude oil used at our Toledo refinery. In addition, we source
domestic crude oil through our connections to the Capline and Mid-Valley pipelines. We also distribute a portion of
our transportation fuels through pipelines owned and operated by Sunoco Logistics Partners L.P. and Buckeye Partners
L.P. We could experience an interruption of supply or delivery, or an increased cost of receiving crude oil and
delivering refined products to market, if the ability of
Our strategy includes executing future refinery acquisitions. Any significant acquisition would likely require us to
incur additional indebtedness in order to finance all or a portion of such acquisition. The level of our
indebtedness has several important consequences for our future operations, including that:
a significant portion of our cash flow from operations will be dedicated to the paym
The spread between WTI and Brent is probably hurting some refiners. But PBF probably replaced a lot of Brent with US crude at slightly lower prices so don't see the spread hurting them that much.But I am bothered that they needed J.Aron for inventory financing which might mean that consumption patterns are below their production.