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EPS100Momentum
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Author has a degree in Engineering and is an avid investor in the market. Experience in industrial materials and structures. In college studied atomic & nuclear physics as well as material engineering. Eastern European
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  • Refiners $WNR & $ALJ are literally on FIRE hitting Sweet spot in margins 0 comments
    Feb 2, 2011 10:47 AM | about stocks: VLO, WNR, ALJ, FTO, TSO, HK, ESV, MRO, BP, XOM, COP, CVX, PTR, CEO, BEXP, GEOI, CRED, ATPG, SGY
    $VLO eps for June Qtr for example is now at .84 eps est., and nearly $3 EPS
    on forward basis estimate: others to watch: $WNR $ALJ $FTO

    If any of you remember, when refiners go in a sweet spot their profits surge and so do their stock prices in the last Sweet Spot, VLO hit $70's.

    Today refiners are heavily shorted and a small increase in buying pressure can cause a panic short squeeze among the millions of shares that are short shares of  the refiner sector.

    Shares short as of Jan. 14th 2011

    (VLO) 16.41 Million shares

    (FTO)  8.26 Million shares

    (WNR) 6.90 Million shares

    (ALJ)    1.56 Million shares

    Refinery margins
    Refining margins are proxied by the 321 crack spread which measures the income generated by the refining product minus the cost of the oil input.

    3 barrels of crude are supposed to generate 2 barrels of gasoline and 1 barrel of heating oil.

    The spread has reached a high level.

    This should entice refineries to increase their production of gasoline or heating oil.




    Stocks: VLO, WNR, ALJ, FTO, TSO, HK, ESV, MRO, BP, XOM, COP, CVX, PTR, CEO, BEXP, GEOI, CRED, ATPG, SGY
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