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Barry Gitarts submits : I like Valero Energy (NYSE:VLO) because it is one of the lowest cost refiners, which in a rising oil market, will give it a pricing advantage over the competition. This advantage is currently evident by using just about any metric.

* Operating margins over the past 12 months increased almost 5% vs 1.8% for the industry.
* ROE of 32.50 vs. 11.5 for the industry.
*• EPS growth over the last 5 years is 50% vs. 15.59% for the industry.
* Sales growth over the last 5 years of 46.80% vs. 15.59% for industry.
* P/E of 8.44 vs. 16.10 for industry.
* Trading at 7.5 x cash flow vs. 10 for industry.
* Trading at 7.35 this year's expected earnings vs. 14.21 for industry.
* Trading at 8.38 next year's expected earnings vs. 13.61 for industry.

What's interesting is the analyst consensus for next year is less than this year, despite the growth for the industry's estimate. Still, this gives Valero an earnings yield of nearly 12% vs. 7.7% for the S&P, and 5.2% for the 10-year t-bond.

This stock is cheap even using the analysts' incorrect estimates, and I say incorrect, because that estimate will be raised, just like it was by 3% this week, and by 6% over the past 12 weeks vs only .42% for the industry.

VLO 1-yr chart:

VLO 1-yr

DISCLOSURE: I maybe long the stocks mentioned above for myself and clients. This is not a recommendation to buy or sell any security.

Source: Valero Energy -- A Low Cost Refiner Turning Big Profits (VLO)