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Strategies & Market Trends : Value Investing

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To: Graham Osborn who wrote (58134)	10/6/2016 12:14:13 PM
From: Micah Lance	Read Replies (1) of 78704

An oil refiner I'm keeping my eye on is HFC. They are smaller, but mainly located midcontinent so they benefit heavily from WTI prices being higher. From what I understand, the areas that produce WTI are now the swing producers. They have such a technological advantage so when prices rise they bring rigs back online pretty quickly and produce that oil at a much lower cost compared to previous previous years. They took a large asset impairment in Q2 for one of their refineries and reported that it may be materially impaired further as it is still 15% above market pricing after the impairments. I haven't done much more research than that as I'm waiting for the situation to clear up, but HFC is trading near it's lows and the company refines both light and heavy crude at some of the lowest costs. Seems to be a well placed refinery for a bounce back in WTI prices as it is leveraged to the WTI/Brent differential with a few issues going on. I'd like to see another impairment of their refinery so that they are showing close to true value of their assets and some insider buying on the open market before I jump in.

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