CAPS Rating: 5 out of 5

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Member Avatar line70day (< 20) Submitted: 2/14/2014 1:35:59 PM : Outperform Start Price: $24.90 PBF Score: -10.11

PBF their continued focus on operation excellence environmental stewardship and safely will position the co. TO BENEFIT FROM OPPORTUNITIES THAT the market may present in 2014 . They generated $150 M of operating cash flow in the Q.They maintained disciplined approach to manageing their balance sheet .Finished the year much as they started with 30% debt to capital ratio. They will maintain quarterly dividend of $.30 per share o class A common stock.


Member Avatar sniggity (83.61) Submitted: 5/18/2013 11:50:22 PM : Outperform Start Price: $29.75 PBF Score: -35.70

PBF was formed in 2008 and went IPO in late 2012. It has a mission to purchase low-margin refineries, and now has 3. One, in Delaware City, was discontinued by the seller and brought back online by PBF. Long story short, from an original purchase of 3 refineries for $1 billion, PBF had $20 billion in revenues in FY2012 and $0.8 billion in profit in FY2012. The last quarter's results were poor due to a fire at one of the refineries and other less significant factors.

In any case, the company has a forward P/E of <6, and is vulnerable to collapse in WTI-Brent spread. Most commodities analysts believe that this spread will remain at or around current value for the next year, which is why I think a year or so is a good time frame to compare with S&P performance. Feedstock pricing volatility affects refiner margins too much to have a longer-term outlook, and PBF does little significant hedging.

PBF has a few unique advantages. It can sell asphalt at a premium, as its refineries are the only two East Coast refineries with cokers. It has a newly built, privately owned rail facility in Delaware City that takes costs down $4/barrel. It is a pure refinery play, for those who want to invest in refineries only, without exploration or retail components. Perhaps its biggest advantage is that it is still not widely known.

This company, like many refiners, is undervalued by the standard metrics. Due to its focus on the less profitable East Coast and its recency, it is trading at a discount in an already heavily discounted industry. Leverage is present, but reasonable, and the company has great cash flows. PT = 60 in the next 1-2 years, barring plummet in oil prices.

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