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Gold/Mining/Energy : Big Dog's Boom Boom Room
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From: Dennis Roth3/8/2013 11:46:06 AM
2 Recommendations  Read Replies (1) of 206305
 
CS on US Independent Refiners

We Like Coastal and Canadian Levered Names (Preferably with MLP catalysts also)'; Revising
Estimates
E. Westlake

Bottom Line - This year we have focused on coastal and Canadian crude levered names with MLP catalysts, e.g., MPC
which now is 60% Gulf Coast. For Permian/Cushing pure plays, we are nervous that Mid-Con crude inventories will start
falling in June which could narrow WTI-Brent spreads. If not in June, then even more likely by the end of 2013 given the
build-out of infrastructure. Gulf Coast refiners and those which can process Canadian Heavy could enjoy EPS uplifts given
another year of heavy maintenance supporting coastal margins, as Gulf Coast crude prices fall, and given a lack of
infrastructure to get Canadian crude to market until 2H14 (even if XL gets approved and as bitumen rail alternatives grow).
We raise 2013 EPS by 17% for the group on our revised margin forecasts and are 7% above consensus.

TSO Looking More Attractive: With concentration indices, e.g., Herfindahl index, not signaling a major competition issue for
the West Coast from TSO's Carson acquisition and with the consolidation of Carson/Wilmington leading to beneficial
outcomes for California motorists, we see a good chance this deal should close. In this case, TSO would have among the
greatest upside of the group to value and EPS.

Select US E&P Now Look More Attractive: After the run-up, US producers like MRO and APC offer more upside.

Click here for Full Note

Includes their '10 Charts to Run Through the Independent Refiners.'
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