it makes absolutely no sense to me. it always comes back. look at the earnings growth rate. How do these shorts all have time to cover before it comes roaring back?
stock was already moving the past months, as Canadian Heavy discount to WTI has come down a lot since last Fall. Better access by rail, means that more consistent pricing vs. world markets which takes the risk of the operating margin falling out of bed at any time. Net margins on heavy crude production out of the Alberta Oil sands on a percentage basis could easily double 2014 vs. 2013 if the global mess adds to the better takeaway options.
I don't find the options hard to trade. the spread is about normal compared to more heavily traded oil stocks.
i like the cash flow pattern, up, up, and the dividend is already high, and they keep raising it.
someday this will be only the second most hated stock on the board.
Im a big owner of GATX, and their purchase philosophy is not to buy at the top of the market for growing their lease fleet. So, they are likely not buying any cars now, where they are normally a large purchaser, and more reason for ARI to consume the production line in order to keep production margins at the peak.
the industry in moving to a new less volatile margin environment. The opening of a huge backdoor to move out excess clean products for export means, that during periods where inventory would normally build, it just gets exported instead. And that means constant high utilization, and even when more light crude hits the system, or gasoline demand swings seasonally down, they just bump up the exports, and send good margin product out the back door. This should keep US product inventory levels near the bottom of the tanks, and prevent periods of disappearing crack margins. Should let the bankers project more consistent processing margins, which will eventually lift stock PE ratios as confidence builds in continuous income reports. I can see where a VLO, MPC, PSX could trade at a 12-14 multiple rather than sub 10. good time to buy and hold.
Yes, it was just a matter of time. And so glad that I had plenty of time to double down on this long term holding and lock in 7%. What a gift.
Not even going to complain about my MAR 75 options expiring worthless. water under the bridge.
Yes i agree, PSX gets a nice piece of the Shale oil/gas/condensate resource as its upgraded to world market priced products. highest merging upgrades are things like plastics, and next highest is lifting 4$/Btu gas up; to $15/BTU minus transportation.
My other all starts stocks on this same theme are:
CBI- building new LNG and Petrochem plants
KMP- moving stuff from A to B for a fixed fee
HFC- Refining the cheap stuff in place
CF- making something useful ( food) out of stranded energy
I agree , but Mr. Market always comes around. its maddening to stay patient. But look at that yield. Look at how KMP has underperformed , say VZ in the past year, about 12%. And they pay only 4.5%. I see 20% upside in just the next 12 months.
You can afford to borrow and add a much of 10% margins business lines to a break even operation and still come out ahead. The combinations add to vertical integration and should provide a more steady margin compared to the roulette wheel of small regional refining.
Why isn't the dramatic price increase in Nat Gas factoring into COP and other large gas producers earnings estimates? For Q1 its going to be a big unexpected plus!
maybe the Navy should enter the 21st Century and realize their is domestic supplies, in near unlimited amounts in the ground trapped in Shale all around the US. They should focus on national security, and not keep doing anti-fossil fuel propaganda for the tree hugging Obama wackos.
And have a lot inside at the strength of diesel, in both inventory trend, and demand.
Those hydrocrackers are putting out just the right product at the right time.
look for margins to explode.
the diesel inventory is about as low as the system can go, so pricing should continue upward from here.
problems in the rear view mirror.
last quarter was turnaround expenses. That plant is back at it, and heavy Canadian feedstock pricing is getting very attractive, as pipeline space into Superior is now on high % allowocation.
rinsanity is returning to being just nutsy regulatory stuff not industry killing reg.
crack spread dips were likely mostly mitigated with hedges.
plenty of distribution funds to keep the high dividend secure. Shorts should give up soon.
I see this returning to a 7-8% yielder with stable EPS margins in 6 months. worth waiting for.
my t-bonds cant drop 2% in yield.
I like the action today, up big on better than average volume. With all the days to cover, we could string several days in row of high % price gains. Just need the market , and the DC mess to clear the way.
wcs is often different than Bakken as far as discounts. with WCS, you do have the same transportation takeaway variability to transport to market. Although with WCS you also have added discounts associated with the process limitations that come with excess extra heavy crude that can at times overwhelm the online heavy crude process locations. Look for periods of very deep WCS discounting which helps margins at northern tier US refineries, such as Montana, and Superior. And if they can look in crude discounts at times of oversupply of Canadian heavies, then the profitability can be assured at least at the level needed to meet the distribution.
This is all just noise. its a big ship and it doesn't veer too far off course very often. They are spending huge investment money on LNG and getting next to no revenue from it this year. By the end of next year, it should be a totally different story. Mr. Market should be saavy enough to show the expected added margin about 6 months ahead of expected production. Big moves between now and then will come due to delays, or schedule improvement, or announcement of more cost overruns. See example of Imperial on the near disaster over timing of Kearl startup.
you cant judge a refining company based on the quarter when they shut the plant down, hire hundreds of temporary contractors, and spend lots of money on replacement parts. They all do this every few years, and Im sure Superior plant had lots of deffered maintenance coming out of a sale. So, off we go, judge the DCF coveraged based on a couple of normal quarters.