Cvr Energy Inc (NYSE:CVI)

CAPS Rating: 4 out of 5

CVR Energy is an independent petroleum refiner and marketer of high value transportation fuels in the mid-continental U.S. and, through a limited partnership, a producer of ammonia and urea ammonia nitrate, or UAN, fertilizers.


Player Avatar Seansonfire (36.94) Submitted: 11/8/2011 8:55:21 AM : Outperform Start Price: $24.73 CVI Score: -28.32

CVR Energy (CVI) spun off it's fertilizer plant in kansas CVR Partners (UAN) which later traded up to a market value of $1.9B. CVI holds a 70% stake in the UAN, making the CVI stake in UAN worth 0.7*1.9B = $1.33 B. CVI's market cap is currently $2.4B so subtract out the UAN portion of $1.33 B and you get $1.07 B for the refining business that CVI still operates.

Crack Spreads for CVI are wide as they take in WTI and Canadian oil sands due to the high complexity of their Coffeyville Refinery and put out over 50% gasoline. The addition of a second refinery location in Wynnewood, Okla with a throughput of 70,000 bdp will add some cashflows, but the margins may be smaller than their Coffeyville Refinery. Overall CVI is making some great moves and is currently undervalued.

No brainer, that this was a buy at $20 a share and will continue to be a a buy upwards of $35 a share.

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