Refinery Valuation Smackdown
Like many other players, I've been trying and failing to call a bottom for the independent refiners, so I put together a comparison of some of their statistics.
Name (Ticker) P/E P/TB Net Profit Margin Debt/Equity
Alon (ALJ) 12.5 1.79 3.1 1.55
Calumet (CLMT) 8.0 1.83 N/A 1.16
Delek (DK) 6.1 1.08 2.5 .64
Frontier (FTO) 4.3 1.93 6.4 .15
Holly (HOC) 5.8 3.31 5.7 .70
Sunoco (SUN) 6.3 1.71 2.5 .71
Tesoro (TSO) 5.1 .85 2.9 .70
Valero (VLO) 4.3 1.24 4.6 .36
Western (WNR) 4.3 1.74 N/A 1.91
The refiners all depend on the crack spread between crude oil and gasoline/other refined products. Right now the crack spread is very low which is the reason for their precipitous declines. I can only guess which direction it will go from here, but hoped to find which of the refiners might be a good value under current market conditions.
Surprisingly, the only stock which meets Ben Graham's strict standard is Valero: less than 15 PE, less than 1.5 price/tangible book, less than .50 debt/equity. But depending on your mindset you might prefer Frontier as the most likely growth stock or Tesoro as the cheapest. I see nothing in particular to recommend the others.
*P/E (TTM), Price/Tangible Book, 5 Year Average Net Profit Margin, and Total Debt/Equity all taken from the respective CAPS ratios pages.