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Refining Your Choices For Portfolio Additions $ALJ $DK $HFC $TSO $VLO



November 07, 2012 – Comments (0) | RELATED TICKERS: ALJ , DK , HFC

If you haven’t taken a look at refining stocks recently you are missing out.  We have a few that can fulfill most investors needs whether you like growth or dividends.  Which is why we continue to feature most of the stocks on this list.

Traditionally, refining stocks have been the despised children of the energy industry and with good reason. A history of needing heavy capital expenditure combined with paper thin margins make for a poor business environment. However, this last month, I have been writing on how the refining niche has completely turned around, as oil market imbalances are radically broadening crack spreads and turning many refiners into cash flow juggernauts.

The segment traditionally offers good dividends. Yields for most refiners are a bit thin at the moment due to recent share price advances. Despite that, this looks like a time when both growth and dividend investors can both happily invest together. But do all refiners benefit from this new environment? I laid the ruler over five refiners: Alon USA Energy (ALJ), Delek US Holdings (DK), HollyFrontier Corp. (HFC), Tesoro Corp. (TSO) and Valero Energy (VLO).

Market Imbalances

Since September, I have been writing about the historical market imbalances in crude oil. Many benchmark crudes are trading at high levels due to regional shortages in Europe, market disruptions caused by after affects of the Arab Spring, as well as unease over Iran. Evidence is Brent Crude spot price on October 4 at $111.94.

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