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$34.76 -0.26 (-0.74%)
8/29/2008 4:01 PM

Valero Energy Corp (VLO)

CAPS Rating:
****

The company owns and operates 18 refineries located in the United States, Canada, and Aruba that produce premium, environmentally clean refined products such as RBOB. It also produces conventional gasolines, distillates, jet fuel, asphalt, petrochemicals.

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Avatar jhl247 (69.70) Submitted: 11/09/06 1:07 PM : Outperform Start Price: $53.02 VLO Score: -27.13

#1 Refinery in the US-- when no new ones are planned to be built in the near future. Price per barrel of processing ability costs $9,000 for Valero vs the $30,000 price per barrel of processing cost for recent buyouts. Their main competitive advantage is their ability to process sour crude (oil from dirt). No brainer.

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Avatar vrgo73 (22.25) Submitted: 11/09/06 11:21 PM

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AGREED! VLO has the capability to refine sour crude. No one really thinks about that now, but as we lose sweet crude sources around the world, which we obviously will (why are we at war?), Valero's niche becomes that much more valuable! They also have service stations popping up everywhere; in good locations I might add. They are making money hand over fist & what do think will happen when oil hits $100 a barrel? We WILL NOT stay at $60 oil!!!!!! This stock is an absolute steal anywhere in the $50's to mid $60's!!!! It's struggling to close above $54 right now, but when it does, it's going to move, & move fast! In reality this stock should be trading at least $70-$75 a share right now....look at that P/E.....and that's at $60 oil!

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Avatar jhl247 (69.70) Submitted: 11/10/06 10:24 AM

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I aggree with you Vrgo73-- oil is bound to hit $100 or more! The rest of the world pays $5/gallon of gas with 92 octane (super unleaded)... When gas prices hit $3.50-$4.00/gallon in the US, people start getting frustrated-- and wars happen.

Valero's ability to process sour crude from oil sands gives it huge advantage to its competitors. Canada's Alberta province holds the most oil reserves in the world in it's oil sands-- and since they're our friendly neighbor, we'll have access to it without military action.

Given that sour crude is approx. $12-$15 less than sweet crude and costs $3-5 extra to process into useable products, it's a no brainer.

I would not time this stock-- but buy it for a long term hold.

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