Fwiw, if you weren't aware of it, Barron's (3/22/07) has a positive write-up on VLO:
Some snippets:
"'Leading refiners like Valero...are interesting to us not because of their high growth but the sheer free cash that they are going to generate in this plateau of commodity prices' says Frederick Sturm, who lists Valero among the top holdings in the Ivy Global Natural Resources Fund."
Chi Chow, an analyst at Merrill Lynch, "this week raised his 2007 earnings estimates for five refiners, including Valero, given "the dramatic upward swings in margins since February."
"'We believe the refining margins will be there for the next year to two,' says Mark Stoeckle, chief investment officer of U.S. equities at Fortis Investments, a Boston asset-management firm that owns Valero."
"'This is a perfect storm, when everything goes right for the refineries,' says Fadel Gheit, an analyst at Oppenheimer & Co.
The earnings cycle could last another three years, says Gheit."
"Valero's shares are trading at a 20% discount to the industry as a multiple of trailing cash flow per share, according to Thomson Financial/Baseline. Over the past five years, Valero typically traded at a 10% premium."
"While Valero's earnings are expected to drop 6% in 2008, that probably reflects conservative oil-price expectations"
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I am considering upping my position. Hesitant about doing so though. Aleady have a goodly amount for me. |
