HollyFrontier Challenged But Still A Buy

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About: HollyFrontier Corporation (HFC), Includes: DK, PARR, PSX
by: Laura Starks
This article is exclusive for subscribers.
Laura Starks
Long only, energy, oil & gas, commodities
Summary

HollyFrontier’s 1st quarter earnings excluding special items were only $0.54/share. However, profits are expected to be higher in the 2nd and 3rd quarters, gasoline season and on into 2020.

The Artesia refinery, in particular, is well-located to get crude from and supply products to the nearby booming Permian oilfield.

All of the company’s refineries have access to discounted inland crudes but the company’s lubes business is encountering oversupply.

The stock price has been dinged, perhaps due to market overhype about crude oil discounts (and consequent large refining margins) last fall.

HollyFrontier Corporation (HFC) owns 457,000 barrels per day (BPD) of Mid-Continent, Rockies, and New Mexico transport fuels refining capacity in five refineries and 28,000 BPD of lubricating oil manufacturing. Its lubes business is