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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (53326)3/26/2014 9:30:59 PM
From: Spekulatius  Read Replies (1) of 78740
 
Sold MUSA @41.25$. I decided to sell my entire MUSA position after going through the 10k. My reason for selling are the weak retail trends - basically both the number of gallons if fuel/station sold, as well as the ancillary retail revenues are down. Reason for the fuel sales/store down was a promotion by Walmart last year, that was not repeated. The problem, I have with this explanation is that fuel gallons/store have been down YoY since 2008.
Ancillary retail sales are mostly cigarettes, because the Murphy USA gas station stores are very small, and cigarette sales are shrinking. Earnings were good because MUSA got a windfall from RIN sales, that most likely will not repeat either. Core retail earnings were about flat, because the increase in store count compensates somewhat for the loss in same store profits. It appears to me that the MUSA thesis hinges upon increasing the fuel retail margin, because I don't think they will be able to increase fuel sales//store (measured in gallons). This is not a growth business for sure and will need a lot of magic from the Spinoff fairy to make the stock work from current prices.

I put part of the proceeds in LMCA @130.25$, based on discount to NAV and the strong history of value creation, as discussed earlier.
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