Tesoro Corp (TSO)
An independent petroleum refiners and marketers in the US with two operating segments: refining crude oil and selling refined products in bulk and wholesale markets and selling motor fuels and convenience products in the retail market.
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roll the dice, short term trade.... hope to get lucky also going with WRN, I myself would never put money into refiners, they are a sad story and always have been
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OOPS ! miss click. Seems like a dart board stock would do better.
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Refiners are shutting down. They will create artificial demaind which will cause share prices to rally 10-20% within a few months.
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Access to crude oil reserves in NW US and Canada
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The demand for petroleum refineries will soon return. Since very little
capacity is being added in the USA, gasoline and diesel costs may approach new highs.
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If the economy dips back down ---> Price of crude drops ---> TSO wins
If the economy stabalizes --> Demand for gasoline increases ---> TSO wins
There's also the chance of a Gulf coast hurricane wrecking havoc on the crude supply chain, increasing the price of gasoline --> TSO wins
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Fidelity screen.
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GET READY FOR THE TSO RIDE TO $20...TSO RIDES A CHART PATTERN BETTER THAN ANY OTHER STOCK I KNOW
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Price relative to book, recovering economy.
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Tesoro has an extremely small P/E due to worried about the oil market. However, even if Tesoro has a rough 2009 and even a 2010 year, at this "bargain bin" price of under $11 / share, long term growth potential is huge. I'm guessing 200% growth or more in five years.
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Graham formula gives me a fair value of $39 using current numbers (EPS of $2.96 and book value of $23.55). Even using pessimistic earning per share of $1.00 for this year would yield a fair value of $23, so that's a discount between 45% and 65% to the current price of $12.57.
In the meantime, I'll get paid a nice dividend of $0.10 per quarter, for a 3% yield.
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JakilaTheHun - http://caps.fool.com/player/jakilathehun.aspx
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refiners beat down
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Refiners appear to be a very cyclical business. Right now, Tesoro is available for 0.63 times book value. Someday in the not too distant future (when?), crack spreads will increase enough to get investors excited. Then Tesoro's price will increase above its book value and I will sell. I don't see any significant risk of default. The company is profitable and debt seems manageable.
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!!!! looks good
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GB recommendations
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Refining margins are currently good (~$16 for RBOB), and there may be a cap on the crude price for a while with 366m bbls in storage (according to Tuesday's (May 19th) numbers). Going into the summer distillate costs should rise, further expanding the crack spread.
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Higher crack spreads
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TSO is financially healthy, and I like the direction the crack spread seems to be taking for the summer, with crude prices appearing to have peaked for the short term while gasoline prices are steady.

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