Tue, Apr. 21, 7:30 PM
- There’s not much value to be found in the stock market by traditional metrics, but the equity strategists at Jefferies think they’ve found five companies that are still bargains.
- The firm cites HollyFrontier (NYSE:HFC), Reliance Steel (NYSE:RS) and Universal (NYSE:UVV) as three value picks whose assets are at least double their liabilities, their long-term debt is less than their working capital, each has enjoyed positive earnings growth the past five years and made consecutive dividend payouts over the past decade, and their P-E ratio is less than 15x over the past 10 years, among other criteria.
- Patterson-UTI Energy (NASDAQ:PTEN) and Tidewater (NYSE:TDW) are seen as more aggressive value picks, meaning their current ratio of assets to liabilities is higher than 1.5x, long-term debt is less than 110% of working capital, and current price-to-book ratio is 1.2x.
- “Investors ought to be mindful that the market is no longer inexpensive,” the Jefferies strategists sum up.
Fri, Apr. 10, 5:17 PM
- The EPA agrees to issue final biofuel quotas for 2014 and 2015 under the federal Renewable Fuel Standard by Nov. 30 in a tentative settlement of an energy industry lawsuit which had challenged EPA delays in establishing the mandates.
- Refiners and biofuel producers have complained that the EPA's repeated delays in setting renewable fuel use requirements have led to uncertainty and volatility in biofuel markets.
- Refiners are required under the RFS to blend a certain amount of biofuels into gasoline and diesel based on the targets established by the EPA; potentially relevant tickers include VLO, TSO, PBF, PSX, ALJ, MPC, WNR, HFC, CVI.
- Biofuels producers also crave the certainty and market demand guaranteed by the annual targets, but they believe the EPA should not back down from setting aggressive renewable fuel quotas; potentially relevant tickers include REGI, FF, AMRS, GEVO, CDTI, SZYM, OTCPK:KIORQ.
Fri, Mar. 27, 5:38 PM
Wed, Mar. 18, 3:24 PM
- Crude oil prices, in the doldrums yet again after U.S. inventories hit record highs for a 10th week and supplies at the futures' Cushing delivery hub hit a peak, turned around to finish higher following the Fed policy statement.
- Nymex crude rose 2.5% to settle at $44.66/bbl, pushing off earlier lows of $42.25 and the lowest intraday level since March 2009; Brent is up 4.5% at nearly $56.
- The gain could prove only a momentary recovery, however, as "speculation is going to grow about operational capacity being hit in Cushing and what that portends for prices,” according to Again Capital John Kilduff, adding that he sees U.S.crude testing $40 soon.
- U.S. refiners are enjoying big gains as the Brent/WTI spread surpasses $11: TSO +5.1%, CLMT +4.7%, CVI +4.8%, HFC +4.6%, MUR +4.5%, WNR +4.4%, VLO +3.9%, RDS.A +3.9%, CVRR +3.7%, MPC +3.3%, PSX +3.2%, ALJ +3.2%.
- ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
Sat, Feb. 28, 5:11 PM
- Despite HollyFrontier's (NYSE:HFC) lackuster Q4, which was largely expected given the extended El Dorado downtime, the tide appears to be turning for HFC, Deutsche Bank says.
- "Operational reliability is improving, with a light maintenance schedule for 2015. Mid-con refining margins are robust, with the Brent-WTI spread, contango benefit, and WCS profitability attractive and likely to widen further in the coming months."
- "Improved execution will need to be demonstrated, and growth catalysts remain somewhat underwhelming for now, but the outlook is clearly much brighter."
- Firm expects HFC to ramp up buyback activity in 2015, "aligning better with the rest of peers’ yield proposition (aggressive buybacks and regular yield)."
- Deutsche has a Hold recommendation and a $53 price target. Implied upside 20.5%.
Wed, Feb. 25, 7:03 AM
Tue, Feb. 24, 5:30 PM
Thu, Feb. 19, 11:31 AM
- Valero Energy (VLO +1.5%) is upgraded to Buy from Hold with a $70 price target, raised from $60, at Deutsche Bank, driven by stronger than expected U.S. product demand, inventory-driven WTI differentials, and a Gulf coast that is "awash in crude optionality."
- The firm expects H1 2015 to be “much stronger” for the entire refining industry than in its 2015 outlook, specifically pointing to VLO's Gulf coast operations as a strong point for the company based on widened crude differentials.
- Although a rising tide is lifting all boats, Deutsche Bank sees the greatest benefit accruing to those with meaningful Gulf coast flexibility, including Marathon Petroleum (MPC +0.3%) as well as VLO, and leverage to widening Brent-WTI differentials, such as HollyFrontier (HFC -3.3%).
- At the same time, DB downgrades Delek US Holdings (DK -3%) to Hold from Buy.
Thu, Feb. 19, 9:53 AM
- HollyFrontier (HFC -1.5%) says its board has authorized a new $500M share repurchase program, using funds that had previously been allocated to its $0.50/share special dividend; the regular dividend of $0.32/share remains unchanged.
- Cutting the special dividend is no surprise given the compression of the Brent/WTI spread vs. when HFC initiated the special dividend in 2011, Wells Fargo writes as it reiterates its Market Perform rating on the stock; HFC likely will be in a negative net free cash flow position in 2015, so it was on an unsustainable path supporting both a regular and special dividend and a share repurchase program, the firm says.
Wed, Feb. 18, 4:36 PM
Tue, Jan. 20, 8:45 PM
- Venezuela’s Citgo Petroleum reportedly has called off its sale process and instead plans a debt sale to raise $2.5B for the cash-strapped country.
- The U.S. oil refining and marketing unit of PdVSA, which operates three oil refineries with a combined 760K bbl/day in processing capacity as well as networks of pipelines and fuel distribution terminals in the eastern U.S., was expected to fetch $8B-$11B in a sale, but plunging crude oil prices have pressured the country, which already had been facing cash flow problems, making a debt sale more attractive as a quicker source of cash.
- The Citgo auction drew interest from U.S. refiners Marathon Petroleum (NYSE:MPC), HollyFrontier (NYSE:HFC) and Valero Energy (NYSE:VLO) as well as P-E firms.
Tue, Jan. 6, 6:28 PM
- Thomson Reuters StarMine data ranks the energy sector as having the worst analyst sentiment, using a model that lists equities by aggregating metrics that include changes in sell-side estimates for company earnings and revenue.
- Chevron (NYSE:CVX) registered the lower score, with analysts lowering estimates more than for 99% of companies; six different analysts have lowered Q4 EPS expectations by an average of 14.3% in the past month.
- Expected Q4 earnings growth in the energy sector is at -19.8%, according to Thomson Reuters data, down from a 6.4% growth expectation on Oct. 1, with Q1 looking even worse at -32.2%.
- Marathon Oil (NYSE:MRO), HollyFrontier (NYSE:HFC) and QEP Resources (NYSE:QEP) are among the other handful of energy companies with the lowest possible score.
Fri, Jan. 2, 5:11 PM
- HollyFrontier (NYSE:HFC) -1.6% AH after saying it expects a lower of cost or market inventory adjustment to result in a FY 2014 pretax charge of $350M-$400M because of falling crude oil prices.
- HFC also says maintenance at its El Dorado refinery in Kansas took 10 days longer than planned and required significant repairs, which caused a shift towards a lighter and sweeter crude slate post-turnaround and limited its overall crude charge in the quarter to 359K bbl/day.
Dec. 15, 2014, 12:33 PM
- BofA Merrill analyst Doug Leggate stays cautious on the refining sector for 2015, although he sees a bullish opportunity in Phillips 66 (PSX +0.5%), which he upgrades to Buy from Neutral with a $90 price target.
- The expected recognition of value risks being materially overhyped compared to what is currently being recognized by MLPs, the analyst says, adding that absence of guidance on the cost impact on the remaining business, limited guidance on tax and lack of precision on disclosure prompts skepticism that the market is not getting ahead of itself.
- Leggate downgrades HollyFrontier (HFC -1.5%) to Neutral from Buy, and PBF Energy (PBF -1.9%) and Delek US (DK -1.9%) to Underperform from Neutral; he also lowers stock price targets for the three, as well as for Valero (VLO +0.4%), Northern Tier (NTI -2.5%) and Marathon Petroleum (MPC -1.1%).
Dec. 3, 2014, 3:15 PM
- U.S. oil refiners are processing record amounts of crude for this time of year, FT reports, taking advantage of falling oil prices and a flood of supply from shale drillers.
- Refiners’ appetite has kept the price of high-quality light U.S. crude closely in line with international prices, defying warnings that a glut would force deep discounts: “The bottom line remains that we haven’t seen an oversupply of light crude,” Marathon Petroleum (MPC +1.5%) says.
- Whether U.S. refineries succeed in absorbing the rising oil tide is up for speculation, but the refiners' own investment plans suggest they have the capacity to handle rising volumes; Valero (VLO +1.4%), for example, plans to add crude units in Houston and Corpus Christi designed to process oil from the nearby Eagle Ford shale.
- Refiners are by far the dominant customers for crude, so the amount purchased by U.S. refiners will be an important guide for world oil markets.
- Also: TSO +0.1%, ALJ +0.5%, PSX +1.6%, WNR +1.2%, HFC +0.4%, CVI +0.8%, PBF +1.8%.
Nov. 21, 2014, 6:45 PM
- Ethanol and other biofuel groups are declaring victory, as the EPA today said a decision to finalize blending requirements for 2014 - first proposed more than a year ago - has been delayed.
- The delay gives hope to ethanol producers that the EPA will rethink how it proposes the annual biofuels levels; the draft 2014 biofuels levels were much lower than the ethanol industry wanted.
- Oil company lobbyists opposed to the law say the idea of setting a retroactive quota shows the EPA is incapable of managing the program; the American Fuel & Petrochemical Manufacturers, which represents energy companies, plans to sue the EPA for failing to issue the 2014 requirements.
- Ethanol stocks: ADM, GPRE, GEVO, MEOH, SZYM, REX, CDTI, REGI, FF, AMRS, ANDE
- Related refining stocks: VLO, HFC, MPC, TSO, WNR, ALJ, PSX, PBF, DK, NTI, ALDW
- Related coal stocks: BTU, WLT, CNX, ACI, ANR, YZC, ARLP, AHGP, NRP, PVG, PVA, OXF, CLD, WLB, SCOK
- Related solar stocks: JASO, SPWR, TSL, FSLR, CSIQ, YGE, EMKR, SOL, JKS, CSUN, SCTY, RGSE, SUNE, HSOL, DQ, ASTI, OTCQB:SOPW
- ETFs: XLE, ERX, VDE, OIH, ERY, DIG, DUG, IYE, FENY, PXJ, RYE, FXN, DDG, FUE, KOL, TAN
HFC vs. ETF Alternatives
HollyFrontier Corp is an independent petroleum refiner. It produces high-value light products such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. It operates in two segments; Refining and HEP.
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