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Valero Energy Corporation Message Board

  • ex_gs_guy ex_gs_guy Apr 30, 2013 5:00 PM Flag

    Mgt not happy with price of VLO which is good for you as a shareholder

    This reminds me a little of TIE before it got bought out but VLO is in a much better place.
    The company is ridiculously undervalued by the market and everyone knows it.
    Mgt is doing all the right things like buying back stock, reducing debt, breaking off the retail piece.
    They are experts in terms of running this instead of that or moving this there and when, etc...just read the transcript from the call today.

    After the dust settles with CST, I think you will see them continue to pay down debt and buy back shares but I think they will increase the dividend by 50%.
    I am dead serious.
    They could even increase it by 100% but I think 50% is reasonable.
    Before the end of the year.

    Cash flow is king and VLO sells stuff everyone needs.

    Sentiment: Strong Buy

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    • Another example illustrating VLO is not necessarily undervalued relative to other refiners. PSX operates 15 refineries (including 3 in Europe, 1 in Asia and 2 domestic joint ventures) with 2.2M bpd throughput capacity and earned $909M in Q1, almost 50% more than VLO.

    • Compare VLO's performance with MPC's, and you can see why VLO is "undervalued". VLO operates 16 refineries with 3M bpd throughput and had Q1 net income of $654M. MPC operates 7 refineries with 1.7M bpd throughput and earned Q1 net income of $725M. MPC's net income includes $50M from midstream assets, but still makes VLO appear the laggard.

    • Saying the company is ridiculously undervalued by the market is not quite true. Valero missed the boat on the glut of inland light crude. Other refiners got lucky by virtue of their locations and simple refineries. Meanwhile, Valero was prepared to process a slate of what were cheaper but became more expensive sour crudes in their complex refineries. Valero was slow to react to crude supply dynamics but slowly is adapting.

      • 1 Reply to beta_seeker
      • ah673000@aol.com ah673000 May 1, 2013 8:48 AM Flag

        Well said ..... VLO has the expensive and complex hardware to do a job that is no longer required.... Meanwhile a bunch of cheap, simple junk is making big bucks in the Midwest.

        Luck? To rigid? Hold over vision from the Greehey days?

        VLO will be ok going forward and will get stronger with each quarter. But it took them way to long to get rid of their old COO , to long to change strategies, to long to improve reliability , etc.

        VLO management made a huge strategic error in 2003/ 2004..... And by 2008 was completed going the wrong direction .

        Klesse has finally turned the huge boat .... It will deliver now.

        I am buying , so the low current price is fine with me. Potential is huge .... And they will deliver .... This will take some patience ....

        AH

 
VLO
54.70+0.13(+0.24%)May 31 4:04 PMEDT