Holly Corp (HOC)

Holly has bottomed. As I have stated in many other pitches, we are going to need oil, and oil refiners, for at least the next 20 years. I like what many other CAPS players have written - no debt, great ROIC, 400m in cash. What has really done it for me today however is the report that an insider bought 10k shares at 47.50 on wednesday in an open market transaction. Meaning not a stock option deal - he bought it retail like you or I would. To me this is a very bullish signal.

In general I like oil refiners because there are HUGE barriers to entry (very capital intensive and virtually impossible to build new refineries in the US due to politics and NIMBY attitude), demand which is always there and usually increasing year to year, and if there are any hiccups in refining production at other facilities they make more money due to decreased overall supply.

In response to the top bear pitch right now, oil refiners in other countries won't likely make a dent in US refinery operations because the US doesn't import gasoline - just oil. Our refined gasoline exports tend to go to places like Venezuela who have nationalized there oil and energy industries that have led to huge inefficiencies. And oh by the way - with the US dollar falling, that makes US refined gas cheaper for other countries to buy which would lead to more demand and overall profits in US dollars.

Finally, like another player states, refiners do better when oil goes down and gasoline goes up because they have to buy the oil from an oil producing company. Eventually there is an equilibrium, but a spike in oil prices have given us a good entry point as Holly Corp has bottomed.

P.S. 1.00% dividend yield shows strength in the fundamentals of the company and will mitigate any short-term price per share decrease.