VLO and HANS
The refining cycle is very close to its peak and margins will likely fall significantly. Get ready to short VLO....it's over-extended and fundamentals are deteriorating. The bulls have a blind eye to this one.
HANS looks like a super growth stock and trades at a reasonable 19 times forward earnings. The Monster drinks are a huge hit and the company has other potential home run products like "Java Monster," a coffee/energy hybrid drink that could explode.
HANS looks like a super growth stock and trades at a reasonable 19 times forward earnings. The Monster drinks are a huge hit and the company has other potential home run products like "Java Monster," a coffee/energy hybrid drink that could explode.
posted by Never-Limp at 12:37 PM
2 Comments:
care to expand on fundies deteriorating?
Its certainlly quite extended and i don't want to buy any refiners here but I'd want to if they were to correct 15% or so.
Margins and returns have jumped significantly over the last 3.5 years and attracted new capacity. Returns are around 17%, nearly double from the midcycle 9%. New capacity + debottlenecking + greater flexibility + slowing demand = lower margins and returns which = lower share prices
VLO is also facing narrower light/heavy spreads which hurts their margins since they process heavy crude. The market doesn't seem focused on this at all.
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