Vertex Should Improve After Awful Q2, Given Valuation Support

Oct. 11, 2022 3:23 PM ETVertex Energy, Inc. (VTNR)18 Comments
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Rational Expectations


  • There are a lot of reasons to be skeptical on Vertex after a dire Q2 showing.
  • However, these are basically commodity refining assets and I think a $16/share valuation is fair (range $5/share-$55/share).
  • There is some downside in the worst case with more management issues or very tight spreads, but equally it seems that the shares could broadly double without heroic assumptions.
  • RBOB spread futures and limited new supply suggest that U.S. refiners may enjoy comfortable margins for some time. The market doesn't seem to want to believe this, but the evidence is there.

Oil Refinery, Chemical & Petrochemical plant


Vertex (NASDAQ:VTNR) is a hated company. Q2 results were an almost unmitigated disaster. The CEO has sold stock. The company ultimately gave up perhaps $90M of value with its hedging strategy. They reduced Q3 guidance last month. Short interest is

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Rational Expectations profile picture
Value-oriented ideas and special situations, generally mid/small cap. Also, orphaned and unfashionable investment ideas, ideally with a catalyst and the prospect of asymmetric upside/downside payoffs. Contrarian tendencies. To some extent I'll go anywhere if it's cheap and I'm more influenced by momentum and quality than I used to be.

Disclosure: I/we have a beneficial long position in the shares of VTNR either through stock ownership, options, or other derivatives. 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.

Additional disclosure: Not intended as investment advice. Author's opinion only. May contain inaccuracies and may not be updated. Author's holdings may change without notice. Investment involves risk of permanent loss. Consult a professional before any investment decisions.

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