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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, STO, GEOI, FOR, ATPAQ, 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

    (NYSE:VLO) 16.41 Million shares

    (NYSE:FTO)  8.26 Million shares

    (NYSE:WNR) 6.90 Million shares

    (NYSE: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, STO, GEOI, FOR, ATPAQ, SGY
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