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HF Sinclair: Crack Spreads Could Stay Higher For Longer

Aug. 03, 2022 4:24 AM ETHF Sinclair Corporation (DINO)8 Comments
Macrotips Trading profile picture
Macrotips Trading


  • HF Sinclair is a mid-sized refiner with 678,000 of refining capacity.
  • DINO's refining business is expected to generate windfall profits in 2022 due to elevated refining margins.
  • HF Sinclair trades at a modest discount to peers on a P/E basis while paying a $0.40 / qtr dividend.

Oil Refinery And Pipeline


HF Sinclair Corporation (NYSE:DINO) is an interesting name that investors can consider accumulating as a hedge against high retail energy prices. It is currently generating windfall profits from high refining margins that could last longer than most analysts expect. It

business overview

Figure 1 - DINO Overview (DINO investor presentation)

crude and product advantage

Figure 2 - DINO crude and product advantage (DINO investor presentation)

crack spread surge

Figure 3 - 321-Crack Spreads surged on Russian oil bans (Seeking Alpha)

gasoline seasonality

Figure 4 - Gasoline shows strong seasonality (Equityclock.com)

gasoline prices

Figure 5 - Gasoline prices are down 25% from peak (tradingeconomics.com)

mid-cycle earnings

Figure 6 - DINO refining mid-cycle EBITDA (DINO investor presentation)

refining ebitda

Figure 7 - DINO refining EBITDA sensitivity to crack spreads (Author created)

analyst estimates

Figure 8 - Analyst estimates are modest (tikr.com)

mid-cycle earnings

Figure 9 - Mid cycle Adjusted Earnings (DINO investor presentation)

posted monthly refining rates

Figure 10 - DINO posted monthly refining index (DINO investor relations website)


Figure 11 - DINO peers (Seeking Alpha)

capital returns

Figure 12 - DINO capital allocation strategy (DINO investor presentation)

price chart

Figure 13 - DINO held $42 support (Author created with price chart from stockcharts.com)

This article was written by

Macrotips Trading profile picture
I spent 5 years as a co-founder and hedge fund CIO / manager. Before that, I was a hedge fund analyst/portfolio manager at a leading Canadian alternative asset manager. I write articles as part of my own due diligence on the stocks that I find interesting, for one reason or another.Follow me on twitter for my thoughts on macro trends.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in DINO over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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