my perspective on VLO is a little different since i have been holding it for a pretty long time and have a low basis. i don't really care if it drops 10 dollars (i guess that's good, since it's already dropped more than that :). i am of the opinion that this is a management that can continue to add value which will eventually be recognized by the market.
what is the catalysts to literally force the market to more properly value VLO higher?
i think the market is in a perpetual "show me" mode toward VLO. but VLO continues to show. the CEO has said he expects 05 to be better than 04, and intimated (i think) that 06 could be better still. the market will adjust the price up in accordance with the "massive" 10x PE if and when that happens, so i guess that's a catalyst -g-. nearer-term, i don't really know, save if next Q is another blowout beyond market expectations and mgmt expands guidance positively.
as far as i am concerned, this is the "best of all possible worlds" for VLO, with light sweet having peaked and a surplus of sour. the skeptical view, naturally, is that if things can't get better they can only get worse. but i think some measure of "worse" is priced into this stock already. and maybe a simple continuation of the BOAPW scenario has not been sufficiently appreciated.
Also, any ideas on current long bondholders/short VLO stock gyrations?
no, but with a ~$7 billion acquisition, half cash half stock, it seems like there must be all kinds of arb activity. my attitude is, take two aspirin and check in a year from now. |
