Valero Energy Corporation is an independent petroleum refining and marketing corporation operating in North America and internationally. The document provides an analysis of Valero conducted by Bloomsburg Investment Group. It summarizes Valero's financial performance, divisions, competitors, and analysts' opinions. Analysts believe Valero is well positioned compared to its competitors due to its ability to maintain profitability in a volatile market and expanding revenue streams internationally. The stock currently presents an attractive buying opportunity.
The document summarizes the performance of two investment strategies in April - Touch Tech and Refineries. Touch Tech added nearly 4% led by a short position in Amazon.com (AMZN) that profited 2.3%. Refineries added 3% with broad gains. The worst performers were Alternative Asset Managers and Shipping, each losing around 1.3%. Looking ahead, the author expects policies to reduce pollution in China to impact steel production and iron ore prices.
The document discusses master limited partnerships (MLPs) and compares them to sausage making and laws. Some key points:
1) MLPs involve a complex assembly process like sausage making, with defects that can be hard to spot, but they provide needed energy infrastructure services and yield attractive returns.
2) MLPs have significantly outperformed other asset classes in recent decades, but high valuations mean lower future returns are likely. There is also risk from rising interest rates and falling energy prices.
3) General partners of MLPs receive incentive distribution rights that pay them an increasing share of cash flows as the MLP grows, which can dilute returns for limited partners but reward the general partners.
This document provides an overview and agenda for a presentation on successful planning strategies for life and investments. It discusses Barry Mendelson's background and experience in financial services. It also summarizes Just Plans Etc., the firm he founded, which provides financial planning and investment management. The presentation agenda covers investment planning, personal planning, and charitable giving strategies.
Mercer Capital's Value Focus: Convenience Store Industry | Q4 2015 | Segment:...Mercer Capital
Mercer Capital’s Convenience Store Industry newsletter is a quarterly publication providing perspective on valuation issues pertinent to multi-unit retailing and QSR industries.
This edition of Energy Perspectives summarizes industry activity in 2015 and outlook for 2016. Cost-cutting and balance sheet restructurings prevailed in 2015 in an effort to ensure survival in early 2016. M&A activity may be led by distressed opportunities, while bankruptcies are expected to accelerate. Once the industry reaches equilibrium, consolidation is expected as a means to capitalize on the “New Normal.”
Gibson Energy is recommended as a Buy based on its commitment to growth through $700M in capital expenditures, ability to provide continued shareholder value through increasing dividends, and strong liquidity position to withstand depressed oil prices. Valuation analyses using comparable companies and a discounted cash flow model imply the share price is undervalued at current levels. However, risks include continued weakness in commodity prices and environmental concerns potentially limiting future growth opportunities.
The litmus test for diversification must be based on the ability of countries to meet their bills even if oil prices remain low. No #GCC country passes that test without dipping into savings or borrowings.
The GCC economies need stimulus through focused spending on transformative programs that can boost qualitative growth.
Alas, regional SWFs continue to be fairly shy about engaging proactively in the domestic economy despite the clear opportunities.
The document summarizes the performance of two investment strategies in April - Touch Tech and Refineries. Touch Tech added nearly 4% led by a short position in Amazon.com (AMZN) that profited 2.3%. Refineries added 3% with broad gains. The worst performers were Alternative Asset Managers and Shipping, each losing around 1.3%. Looking ahead, the author expects policies to reduce pollution in China to impact steel production and iron ore prices.
The document discusses master limited partnerships (MLPs) and compares them to sausage making and laws. Some key points:
1) MLPs involve a complex assembly process like sausage making, with defects that can be hard to spot, but they provide needed energy infrastructure services and yield attractive returns.
2) MLPs have significantly outperformed other asset classes in recent decades, but high valuations mean lower future returns are likely. There is also risk from rising interest rates and falling energy prices.
3) General partners of MLPs receive incentive distribution rights that pay them an increasing share of cash flows as the MLP grows, which can dilute returns for limited partners but reward the general partners.
This document provides an overview and agenda for a presentation on successful planning strategies for life and investments. It discusses Barry Mendelson's background and experience in financial services. It also summarizes Just Plans Etc., the firm he founded, which provides financial planning and investment management. The presentation agenda covers investment planning, personal planning, and charitable giving strategies.
Mercer Capital's Value Focus: Convenience Store Industry | Q4 2015 | Segment:...Mercer Capital
Mercer Capital’s Convenience Store Industry newsletter is a quarterly publication providing perspective on valuation issues pertinent to multi-unit retailing and QSR industries.
This edition of Energy Perspectives summarizes industry activity in 2015 and outlook for 2016. Cost-cutting and balance sheet restructurings prevailed in 2015 in an effort to ensure survival in early 2016. M&A activity may be led by distressed opportunities, while bankruptcies are expected to accelerate. Once the industry reaches equilibrium, consolidation is expected as a means to capitalize on the “New Normal.”
Gibson Energy is recommended as a Buy based on its commitment to growth through $700M in capital expenditures, ability to provide continued shareholder value through increasing dividends, and strong liquidity position to withstand depressed oil prices. Valuation analyses using comparable companies and a discounted cash flow model imply the share price is undervalued at current levels. However, risks include continued weakness in commodity prices and environmental concerns potentially limiting future growth opportunities.
The litmus test for diversification must be based on the ability of countries to meet their bills even if oil prices remain low. No #GCC country passes that test without dipping into savings or borrowings.
The GCC economies need stimulus through focused spending on transformative programs that can boost qualitative growth.
Alas, regional SWFs continue to be fairly shy about engaging proactively in the domestic economy despite the clear opportunities.
TransCanada Corp is a midstream energy infrastructure company that operates pipelines across North America. It has a diversified portfolio of natural gas and liquids pipelines, as well as power generation assets. The analyst recommends a Buy for TRP based on three investment theses: 1) The rejection of the Keystone XL pipeline will have limited long-term impact on TRP. 2) TRP has a robust earnings structure supported by long-term contracts. 3) TRP's strategic power assets provide attractive, stable cash flows. Valuation analyses using comparable companies and a discounted cash flow model imply the stock is undervalued. Key risks include commodity price volatility and opposition to new pipeline projects.
Energy Industry Report: Energy Perspectives - January 2015Duff & Phelps
This edition of Energy Perspectives provides a recap of industry activity in 2014. Despite fairly consistent falling crude oil prices over the past six months, the industry experienced a record number of oilfield (OFS) M&A transactions for the fourth year in a row, achieving 329 announced transactions in 2014. For more detail on recent OFS trends, public comps and deal activity, read the report.
The DSP World Energy Fund is a fund of funds that invests in the BlackRock Global Funds – World Energy Fund and BlackRock Global Funds – New Energy Fund, which invest primarily in equity and equity-related securities of energy and alternative energy companies. The fund seeks long-term capital growth and is suitable for investors with a long-term investment horizon who are looking for exposure to the energy and alternative energy sectors. Major holdings include companies like Royal Dutch Shell, BP, Chevron, and Exxon Mobil.
This document provides a semi-annual update on the performance of Fairfield Sentry Limited (Sentry), a fund that uses a strategy called a split strike conversion to invest in the S&P 100 index. In the second half of 2007 and January 2008, Sentry delivered returns of 3.21% and 0.63% respectively, outperforming the S&P 100 index despite market turbulence. Sentry's strategy aims to match the return of the index with lower volatility by alternating between exposure to the index through options and holding cash.
The article discusses waste to energy as a way to recycle hydrocarbon footprints. It notes that global energy demand is expected to increase 50% by 2030, requiring an additional 30 billion barrels of oil annually. This increased demand is driven by growing economies in emerging markets seeking to industrialize and raise living standards. The article suggests waste to energy could help meet this demand by converting municipal waste and agricultural residues into energy, providing a recyclable source of hydrocarbons.
The document is a newsletter called "The Dividend Weekly" that provides information on dividend-paying stocks. It includes sections that list the best performing large cap, mid cap, and small cap dividend stocks for the past week and year-to-date. It also covers yield and valuation metrics for dividend stocks across various geographic regions and industry sectors. The newsletter is a free weekly report that subscribers can sign up to receive.
I made the presentation for the final project for Global Portfolio Management class by using several asset management software such as Ibbotson Encorr, Zephyr Associates, and Barra Portfolio Manager.
This document brings together a set of latest data points and publicly available information relevant for Resources. We are very excited to share this content and believe that readers will benefit immensely from this periodic publication immensely.
This document provides an overview of Montgomery Investment Management, including:
- Key personnel with photos and titles
- Investment philosophy
- Fund performance charts showing the Montgomery Fund outperforming benchmarks over time
It also includes the firm's views on:
- The coronavirus and its potential economic impacts
- Ongoing low interest rates and stretched stock market valuations
- Resources sector outlook for 2020 and beyond
- Australian banking sector challenges in 2020
- Slowing Australian retail sales and consumer outlook
The Clorox Company reported sales growth for various business segments in fiscal years 2005 and 2006:
- Laundry/Home Care sales increased 5% in FY05 driven by volume growth and price increases, and increased 5% YTD FY06.
- Water Filtration/Canada/U.S. sales declined 1% in FY05 but increased 3% YTD FY06, with higher Canada and trade spending offsetting lower Auto and Brita volumes.
- Bags & Wraps sales grew 15% in FY05 on favorable product mix and pricing, and increased 12% YTD FY06.
- Total Clorox sales increased 5% in FY05
The document summarizes Callan's 2017 10-year capital market projections. Key points include:
- Broad U.S. equity is projected to return 6.85% annually with a standard deviation of 18.25%.
- U.S. fixed income is expected to return 3% annually with less risk (standard deviation of 3.2%) as yields rise gradually.
- Real estate is projected to return 5.75% annually with a standard deviation of 9.15%, reflecting declining cap rates.
The document provides an analysis of stock valuations in the Saudi Arabian market. It finds that earnings growth is slowing, with projected earnings growth of 29.1% in 2005 and 18.9% in 2006, down from over 50% in previous years. However, the Tadawul stock index has been rising faster than earnings, creating a "credibility gap". The analysis also finds that Saudi stocks trade at high price-to-earnings ratios even after accounting for fast earnings growth, and that valuations may compress as earnings growth slows. Several objections to the bearish view are addressed, but the document concludes Saudi stocks appear overvalued relative to global averages.
U.S. markets saw mixed returns in December as signs of economic recovery were offset by weaknesses emerging in the housing and bond markets. While job growth and consumer confidence recovered from hurricanes, housing data showed declining sales and rising inventories. Bond yields also inverted for the first time since 2000, a potential warning sign of recession. The Federal Reserve raised rates again but investors hoped this signaled the end of the tightening cycle. Overall, the document assessed recent economic indicators and market performance in December and provided an outlook looking into 2006.
Mercer Capital's Value Focus: Energy Industry | Q4 2017 | Segment: Explorati...Mercer Capital
Mercer Capital's Energy Industry newsletter provides perspective on valuation issues. Each newsletter also typically includes macroeconomic trends, industry trends, and guideline public company metrics.
Olympic Wealth Fund Javelin Class 'A' Fact sheet November endOlympic Wealth Fund
The Javelin Global Fund Fact Sheet provides performance and holdings information for the Class A shares as of November 2014. Over the 3 year period the fund has returned 69.30% and since its July 2011 inception has returned 62.11%. For 2014 year to date the return was 121.58%. The top five holdings are in the financial sector and based in the UK and US. The fund has a diversified portfolio with 73% in quoted equities and 27% in private equity holdings.
This document provides contact information for Devon Energy's investor relations team. It also includes standard legal disclaimers about forward-looking statements and the use of non-GAAP financial measures in company presentations. The document highlights Devon's high-quality asset portfolio, with a focus on increasing activity and investment in the STACK and Delaware Basin plays to deliver production and cash flow growth.
This report from S&P Capital IQ provides an overview and thematic outlook of the European insurance sector. The report is overweight on the sector, as rising interest rates and equity markets provide tailwinds. While accounting impacts of rising rates can cause short-term noise, higher investment returns will ultimately benefit life insurers. The report also notes regulatory uncertainties from Solvency II and the designation of some firms as globally systemic insurers.
Safety Oil Exploration Corporation is considering expanding into Nigeria's oil market. The company would either establish a subsidiary or enter a joint venture. Nigeria has potential but also risks, as the president's health is uncertain and the political situation unstable. Safety Oil's entry strategy analysis includes considerations around marketing, financing, staffing, pricing, and projected revenue from oil products like petrol and diesel. However, the report recommends holding off on investing due to country risks from Nigeria's unstable government and political situation.
This document provides an initiating coverage report on Exxon Mobil Corp by The William C. Dunkelberg Owl Fund. It recommends buying Exxon stock with a target price of $88.07, noting that Exxon is currently trading at a discount to its historical valuation relative to competitor Chevron. The report analyzes Exxon's business segments, the integrated oil and gas industry environment of low oil prices and excess supply, and catalysts like expansions that are expected to drive future earnings growth.
- The document recommends buying Exxon Mobil stock, implying a 12-20% return, with a current market cap of $375.74B.
- Exxon has weathered business cycles through revenue generation and diversification across upstream, downstream, and chemical operations. Chemical operations grew substantially in Q1 2014, offsetting declines elsewhere.
- Exxon has allocated capital intelligently to projects with high returns, positioning it well for future growth in areas like Asia and a stabilizing crude oil market.
TransCanada Corp is a midstream energy infrastructure company that operates pipelines across North America. It has a diversified portfolio of natural gas and liquids pipelines, as well as power generation assets. The analyst recommends a Buy for TRP based on three investment theses: 1) The rejection of the Keystone XL pipeline will have limited long-term impact on TRP. 2) TRP has a robust earnings structure supported by long-term contracts. 3) TRP's strategic power assets provide attractive, stable cash flows. Valuation analyses using comparable companies and a discounted cash flow model imply the stock is undervalued. Key risks include commodity price volatility and opposition to new pipeline projects.
Energy Industry Report: Energy Perspectives - January 2015Duff & Phelps
This edition of Energy Perspectives provides a recap of industry activity in 2014. Despite fairly consistent falling crude oil prices over the past six months, the industry experienced a record number of oilfield (OFS) M&A transactions for the fourth year in a row, achieving 329 announced transactions in 2014. For more detail on recent OFS trends, public comps and deal activity, read the report.
The DSP World Energy Fund is a fund of funds that invests in the BlackRock Global Funds – World Energy Fund and BlackRock Global Funds – New Energy Fund, which invest primarily in equity and equity-related securities of energy and alternative energy companies. The fund seeks long-term capital growth and is suitable for investors with a long-term investment horizon who are looking for exposure to the energy and alternative energy sectors. Major holdings include companies like Royal Dutch Shell, BP, Chevron, and Exxon Mobil.
This document provides a semi-annual update on the performance of Fairfield Sentry Limited (Sentry), a fund that uses a strategy called a split strike conversion to invest in the S&P 100 index. In the second half of 2007 and January 2008, Sentry delivered returns of 3.21% and 0.63% respectively, outperforming the S&P 100 index despite market turbulence. Sentry's strategy aims to match the return of the index with lower volatility by alternating between exposure to the index through options and holding cash.
The article discusses waste to energy as a way to recycle hydrocarbon footprints. It notes that global energy demand is expected to increase 50% by 2030, requiring an additional 30 billion barrels of oil annually. This increased demand is driven by growing economies in emerging markets seeking to industrialize and raise living standards. The article suggests waste to energy could help meet this demand by converting municipal waste and agricultural residues into energy, providing a recyclable source of hydrocarbons.
The document is a newsletter called "The Dividend Weekly" that provides information on dividend-paying stocks. It includes sections that list the best performing large cap, mid cap, and small cap dividend stocks for the past week and year-to-date. It also covers yield and valuation metrics for dividend stocks across various geographic regions and industry sectors. The newsletter is a free weekly report that subscribers can sign up to receive.
I made the presentation for the final project for Global Portfolio Management class by using several asset management software such as Ibbotson Encorr, Zephyr Associates, and Barra Portfolio Manager.
This document brings together a set of latest data points and publicly available information relevant for Resources. We are very excited to share this content and believe that readers will benefit immensely from this periodic publication immensely.
This document provides an overview of Montgomery Investment Management, including:
- Key personnel with photos and titles
- Investment philosophy
- Fund performance charts showing the Montgomery Fund outperforming benchmarks over time
It also includes the firm's views on:
- The coronavirus and its potential economic impacts
- Ongoing low interest rates and stretched stock market valuations
- Resources sector outlook for 2020 and beyond
- Australian banking sector challenges in 2020
- Slowing Australian retail sales and consumer outlook
The Clorox Company reported sales growth for various business segments in fiscal years 2005 and 2006:
- Laundry/Home Care sales increased 5% in FY05 driven by volume growth and price increases, and increased 5% YTD FY06.
- Water Filtration/Canada/U.S. sales declined 1% in FY05 but increased 3% YTD FY06, with higher Canada and trade spending offsetting lower Auto and Brita volumes.
- Bags & Wraps sales grew 15% in FY05 on favorable product mix and pricing, and increased 12% YTD FY06.
- Total Clorox sales increased 5% in FY05
The document summarizes Callan's 2017 10-year capital market projections. Key points include:
- Broad U.S. equity is projected to return 6.85% annually with a standard deviation of 18.25%.
- U.S. fixed income is expected to return 3% annually with less risk (standard deviation of 3.2%) as yields rise gradually.
- Real estate is projected to return 5.75% annually with a standard deviation of 9.15%, reflecting declining cap rates.
The document provides an analysis of stock valuations in the Saudi Arabian market. It finds that earnings growth is slowing, with projected earnings growth of 29.1% in 2005 and 18.9% in 2006, down from over 50% in previous years. However, the Tadawul stock index has been rising faster than earnings, creating a "credibility gap". The analysis also finds that Saudi stocks trade at high price-to-earnings ratios even after accounting for fast earnings growth, and that valuations may compress as earnings growth slows. Several objections to the bearish view are addressed, but the document concludes Saudi stocks appear overvalued relative to global averages.
U.S. markets saw mixed returns in December as signs of economic recovery were offset by weaknesses emerging in the housing and bond markets. While job growth and consumer confidence recovered from hurricanes, housing data showed declining sales and rising inventories. Bond yields also inverted for the first time since 2000, a potential warning sign of recession. The Federal Reserve raised rates again but investors hoped this signaled the end of the tightening cycle. Overall, the document assessed recent economic indicators and market performance in December and provided an outlook looking into 2006.
Mercer Capital's Value Focus: Energy Industry | Q4 2017 | Segment: Explorati...Mercer Capital
Mercer Capital's Energy Industry newsletter provides perspective on valuation issues. Each newsletter also typically includes macroeconomic trends, industry trends, and guideline public company metrics.
Olympic Wealth Fund Javelin Class 'A' Fact sheet November endOlympic Wealth Fund
The Javelin Global Fund Fact Sheet provides performance and holdings information for the Class A shares as of November 2014. Over the 3 year period the fund has returned 69.30% and since its July 2011 inception has returned 62.11%. For 2014 year to date the return was 121.58%. The top five holdings are in the financial sector and based in the UK and US. The fund has a diversified portfolio with 73% in quoted equities and 27% in private equity holdings.
This document provides contact information for Devon Energy's investor relations team. It also includes standard legal disclaimers about forward-looking statements and the use of non-GAAP financial measures in company presentations. The document highlights Devon's high-quality asset portfolio, with a focus on increasing activity and investment in the STACK and Delaware Basin plays to deliver production and cash flow growth.
This report from S&P Capital IQ provides an overview and thematic outlook of the European insurance sector. The report is overweight on the sector, as rising interest rates and equity markets provide tailwinds. While accounting impacts of rising rates can cause short-term noise, higher investment returns will ultimately benefit life insurers. The report also notes regulatory uncertainties from Solvency II and the designation of some firms as globally systemic insurers.
Safety Oil Exploration Corporation is considering expanding into Nigeria's oil market. The company would either establish a subsidiary or enter a joint venture. Nigeria has potential but also risks, as the president's health is uncertain and the political situation unstable. Safety Oil's entry strategy analysis includes considerations around marketing, financing, staffing, pricing, and projected revenue from oil products like petrol and diesel. However, the report recommends holding off on investing due to country risks from Nigeria's unstable government and political situation.
This document provides an initiating coverage report on Exxon Mobil Corp by The William C. Dunkelberg Owl Fund. It recommends buying Exxon stock with a target price of $88.07, noting that Exxon is currently trading at a discount to its historical valuation relative to competitor Chevron. The report analyzes Exxon's business segments, the integrated oil and gas industry environment of low oil prices and excess supply, and catalysts like expansions that are expected to drive future earnings growth.
- The document recommends buying Exxon Mobil stock, implying a 12-20% return, with a current market cap of $375.74B.
- Exxon has weathered business cycles through revenue generation and diversification across upstream, downstream, and chemical operations. Chemical operations grew substantially in Q1 2014, offsetting declines elsewhere.
- Exxon has allocated capital intelligently to projects with high returns, positioning it well for future growth in areas like Asia and a stabilizing crude oil market.
- Jericho Oil published its annual letter to shareholders from the Chairman and CEO Allen Wilson discussing the company's performance in 2015 and outlook.
- In 2015, Jericho made three acquisitions in Central Oklahoma of producing oil and gas assets totaling over $17 million and increasing production by 158 barrels per day.
- Despite a challenging market with oil prices down 65% from 2014, Jericho increased its proved reserves by 367% year-over-year through its acquisition strategy.
EY Price Point: global oil and gas market outlookEY
The theme for this quarter is reprieve. Crude prices rose steadily throughout 1Q19 as OPEC+ reigned in production to counteract the impact of North American production growth. What lies ahead is uncertain, but downward pressures loom over the marketplace.
This document analyzes and compares five pure play producers in the Midland Basin: Diamondback Energy (FANG), Laredo Petroleum (LPI), Parsley Energy (PE), Approach Resources (AREX), and RSP Permian (RSPP). It finds that FANG and RSPP have outperformed on production growth per share and maintain the cleanest balance sheets, positioning them well to continue growing without needing to tap capital markets. In contrast, AREX and PE appear overleveraged and may need to raise equity. Based on its analysis of growth, leverage, and trading multiples, the document recommends buying FANG and RSPP while shorting PE.
Financial Algorithms presents the energy trading scenario for the year 2016. In this presentation, after examining various fundamental factors in energy sector, FA forecasts the crude oil price, gasoline & natural gas price levels for the year 2016; in case of mean volatility levels and high volatility levels, both. FA also focuses on how to model price levels and volatility surfaces in low volatility and high volatility scenarios under forward & forward-forward models using various energy contracts and spreads i.e. crack spread. Various greek sensitivities including second order & third order greeks, which can be helpful in projecting the price & volatility levels, are also described. At the end, correlation factors, fundamental & technical both, are discussed. These correlation factors are exogenous in price forecasting, and new emerging trends which can affect the energy trading in a long run also been discussed.
Between 2014-2015, crude oil prices fell more than 50% due to excess supply and uncertain demand. The US has increased shale oil production, reducing imports and maintaining high stock levels. China's economic slowdown has weakened oil demand. Saudi Arabia wants to maintain market share by keeping production high to weaken shale producers' profitability. Low prices are expected to continue into 2018 as supply remains high and demand growth slows. Energy companies must optimize operations to improve efficiency in this challenging market.
- The document discusses investing in Tesoro Corporation, an independent petroleum refining and marketing company. It is analyzing Tesoro as a potential buying opportunity following the decline in the energy sector.
- Tesoro has refineries located on the West Coast and in the Mid-Continent region of North America. The analysis sees potential for Tesoro to take advantage of increasing oil price spreads and higher utilization rates through its downstream refining and retail assets.
- A sum-of-the-parts valuation of Tesoro's refining, retail and logistics businesses points to 26% upside from the current share price, suggesting Tesoro is undervalued and represents an attractive investment opportunity.
Oil Prices, the shale, the plunge and outlookErol Metin
Oil prices plunged from 2014-2016 due to a perfect storm of oversupply, a strong US dollar, and weakened demand. Conditions have balanced out, leading analysts to forecast higher prices in 2017, with estimates around $50-60 per barrel. Shale oil production growth has slowed in the US, but new technologies allow for continued expansion. Lower investments mean conventional production may not keep up with demand, which could be filled by OPEC and support higher prices.
The document discusses the oil price correction from 2014 to the present. Unlike 2008, when prices fell due to reduced demand during a financial crisis, current low prices are due to overproduction. The document outlines factors that could trigger a price bottom within the next 3-6 months, including production cuts by OPEC, China and Europe implementing more quantitative easing programs, and conflicts in the Middle East. Eagle Energy's investment strategy balances exposure across oil and gas subsectors and utilizes technical and financial analysis to maximize returns.
OIL's vision is to be a knowledge-based, competitive exploration and production company with global presence and selective presence across the oil and gas value chain in India, maximizing shareholder value while respecting stakeholders and the environment. The document discusses OIL's potential for mergers and acquisitions to expand beyond territorial boundaries into the upstream, downstream, natural gas, and chemicals value chains. It analyzes the different risk and return profiles of businesses in each segment of the oil and gas industry value chain.
Bassam Fattouh - The Adjustment in the Oil Market: Cyclical or Structural?UNU-WIDER
The document summarizes recent trends in the global oil market since prices fell sharply in 2014. It discusses the supply-demand imbalance that led to rising stockpiles. While lower prices were expected to induce production cuts from non-OPEC suppliers and demand increases, adjustments have occurred more slowly than anticipated. Capital expenditures have declined significantly but many major projects approved during high prices are still coming online. Decline rates are accelerating in some mature areas with less investment. The investment and production cycle for US shale is much different than conventional oil, with shorter timelines between investment and production/decline.
Cimarex Energy is an oil and gas exploration company with assets primarily in Texas, Oklahoma, and New Mexico. The company's stock price has declined in recent months due to falling energy prices. However, Cimarex has strong growth potential from its Permian Basin and Delaware Basin assets which have high oil weighting. Cimarex also has a competitive advantage through increased drilling efficiencies and a strong balance sheet, positioning it well for industry volatility. An analysis indicates the stock is undervalued and offers upside potential.
Company Profile (Occidental Petroleum Corporation)Muhammad Hasnain
I wrote this company profile as a part of my two weeks online course at Coursera conducted by Duke University. Readers can find a set of brief facts about 'Occidental Petroleum Corporation' that are good enough to get an overall review of the company's operations and performance over time.
Tesoro Corporation is a leading U.S. refiner and marketer of petroleum products. The analysts recommend holding Tesoro stock. Tesoro operates six refineries producing 850,000 barrels per day. Revenue increased to $40.63 billion in 2014. However, Tesoro's growth will be limited as it approaches refining capacity. The analysts expect slower growth and declining profit margins. Interest rate increases could also negatively impact Tesoro due to its debt levels.
Oil & Money 2015
Chair: Bob Maguire - Managing Director The Carlyle Group
Panel: Poppy Allonby - Managing Director, Natural Resources BlackRock Investment Management
Michael Hafner - Head of Oil & Gas Investment Banking, EMEA UBS
Alastair Maxwell - Co-Head of Global Energy Goldman Sachs
Christof Rühl - Global Head of Research Abu Dhabi Investment Authority
Stock Pitch For Pipes And Walves Distribution PowerPoint Presentation Ppt Sli...SlideTeam
Our Stock Pitch For Pipes And Walves Distribution PowerPoint Presentation Ppt Slide Template is the perfect way to pitch your stock. We have researched thousands of stock pitches and designed the most impactful way to convince your investors to invest in your equity. http://bit.ly/31HJQAT
Enterprise Products Partners L.P. is the largest publicly traded energy partnership in the United States. They operate over 51,000 miles of pipelines transporting natural gas, NGLs, crude oil and petrochemicals. Analysts expect EPD to benefit from increased domestic energy production and have ongoing capital projects. Based on a discounted cash flow valuation, analysts value EPD at $41.43 and have placed a BUY rating due to the current price of $37.40 being undervalued.
Global Economic Outlook for Ethanol Producerskcoemkt
The document provides an overview of the global economic outlook for ethanol producers. It discusses factors such as crude oil and corn prices, US and global ethanol supply and demand fundamentals, export market conditions in countries like Canada and Brazil, and seasonal price trends for ethanol. It analyzes how economic conditions in key countries may impact their ethanol imports. The outlook suggests ethanol inventories may increase in early 2015 unless production rises or exports are stronger than expected.
1. Bloomsburg Investment Group
Equity Analysis
Valero Energy Corporation (VLO)
Analysts:
Nico Wolfgang, Class of 2017
Jacob Moser, Sam Izzo, Kris Gross, Chandler Junk, Keegan Carl, Class of 2018
Corporate Details:
Name
Ticker
Domicile
Sector
Industry
Exchange
Last Close
Price 52 Wk High
Price 52 Wk Low
Latest Dividend
Dividend Yield % TTM
Beta 5 Yr (MoEnd)
Avg Daily Volume (3 Mo)
Shares Outstanding (mil)
Number of Analysts
Valero Energy Corp
VLO
United States
Energy
Oil & Gas Refining & Marke�ng
NEW YORK STOCK EXCHANGE, INC.
65.16
73.88
51.68
0.60
2.92
2.02
6,327,459.98
470.39
4
Corporate Summary:
Valero Energy Corpora�on is an independent petroleum refining and
marke�ng corpora�on, opera�ng in the United States, Canada, the
Caribbean, the United Kingdom, and Ireland, in addi�on to expor�ng to
South America and Asia. Valero’s company is split into two main
segments, refining and ethanol. The Refining segment is involved in
refining, wholesale marke�ng, product supply, and distribu�on, and
transporta�on opera�ons. This segment produces conven�onal and
premium gasolines, gasoline mee�ng the specifica�ons of the California
Air Resources Board (CARB), reformulated gasoline blend stock for
oxygenate blending, diesel fuels, lowsulfur and ultralowsulfur diesel
fuels, CARB diesel fuel, dis�llates, jet fuels, asphalts, petrochemicals,
lubricants, and other refined products. The Ethanol segment produces
and sells ethanol and dis�llers grains. Valero sell their products
through more than 7,500 outlets. These range from Valero, Diamond
Shamrock, Ultramar, Beacon, and Texaco. Valero Energy Corpora�on
also owns and operates 11 ethanol plants with a combined ethanol
produc�on capacity of approximately 1.3 billion gallons per year. Valero
is widely regarded as the America’s fastest growing gasoline brand.
Bloomsburg Investment Group Opinion:
As a group, we believe Valero is the best op�on to buy in an otherwise una�rac�ve sector. Despite drops in oil prices,
Valero was s�ll able to increase their revenue on their fiscal year. Two of Valero’s biggest compe�tors, Exxon, and
Chevron, have experienced drops in profit. Chevron has experienced lawsuits in recent �mes, and has had to sell off
assets in order to make up for losses. Exxon has experienced nega�ve growth for the past three years, as well
decreased their dividends. Valero is a strong company, and is willing to adapt to the changing �mes in a vola�le market,
in order to maintain profitability. They have also expanded into interna�onal environments, and are the largest gasoline
provider in the United Kingdom. In addi�on, they have begun to lease space on oil tankers for exports to both South
America and Asia, thus opening up another revenue stream. The execu�ves at Valero understand the concerns of
profitability in the energy sector and are laying the necessary groundwork to stay profitable. At this current �me, the
stock is at an extremely low price based on our valua�ons, making it an excellent �me to purchase Valero.
Page 1 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct
2. Valero Energy Corp
VLO
Financial Summary, Year End 2015 (in millions)
Market Capitaliza�on
Total Revenue
Gross Profit
Opera�ng Income
Net Income Cont Ops
Net Income
Current Assets
Cash
Total Assets
Current Liabili�es
Longterm Liabili�es
Total Liabili�es
Total Equity
Opera�ng Cash Flow
Inves�ng Cash Flow
Financing Cash Flow
Change In Cash
EBITDA
Enterprise Value
Capital Expenditure
P/E Ra�o Forward
PEG Ra�o
Dividend Yield % TTM
30,650.79
87,804.00
13,153.00
6,358.00
4,101.00
3,990.00
14,972.00
4,114.00
44,343.00
7,360.00
16,456.00
23,816.00
20,527.00
5,611.00
2,487.00
2,545.00
425.00
8,246.00
33,913.79
1,618.00
8.36
13.27
2.92
Financial Highlights
August 20-25: 2015 Stock Market Sell off/flash crash, caused by China and Greece
Oct 28 – Nov 5: Large jump from $63.42 to 71.93 as they release Q3 results, with large
growth shown
February 3: Low as oil price plummeted, due to talks between OPEC and Russia
stopping
February 8: Oil price plummets even further, causing all energy stocks to fall
While their income went down, so have expenses, allowing the gross profit and net
income to go up over the prior year. EPS has also increased. Dividends have also
increased significantly, going up from $1.05 to $1.70 per share. Refining, their
strongest segment, was able to increase its revenue while also decreasing expenses to
the prior year. With the decline in oil prices, their operating margin per barrel of oil has
also increased by more than $1 per barrel. One main concern is the decline in ethanol
profits, but it is a much smaller percentage of the actual income for the company.
Investment Growth
Time Period: 3/1/2013 to 2/29/2016
5/2013 8/2013 11/2013 2/2014 5/2014 8/2014 11/2014 2/2015 5/2015 8/2015 11/2015 2/2016
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Valero Energy Corp 41.9% S&P 500 TR USD 35.8%
Page 2 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct
3. Valero Energy Corp
VLO
4Q Earnings
Jan. 29��, 2016
Valero’s 4Q15 Earnings came out be�er than Es�mated. Valero’s revenues surpasses es�mates
of Wall Street by 8.7%. Along with the EPS are around $1.8, roughly 22% higher than the
es�mated EPS of $1.5. Valero’s 4Q15 net income came in at $862 million, which is a decrease
by 9%, however it is due to opera�ng income of its refining segment. As far as the yearly
performance revenues were at $87.8 billion, 1% greater than es�mates. In all, the 2015
adjusted EPS were 38% higher than the 2014 adjusted EPS.
Projection from Analysts
March 5��, 2016
Valero Energy Corpora�on has become a Diamond in the Rough. Even
with the declining oil prices, Valero managed to climb from $50 a share
to over $70 a share. Valero’s return on assets and return on equity are
both slightly above industry averages. Also, the Debttoequity ra�o of
0.3 is below industry average of 0.5. Valero’s stock is projected to
range from a low of $65 to a high of $100 a share. The room for
improvement is substan�al.
Expansion?
March 14��, 2016
Valero looks to become a poten�al buyer of Sunoco LP. Energy Transfer
Equity LP ETE is contempla�ng the sale of Sunoco LP. At the Start of 2016,
Energy Transfer Equity is considering asset sales as a way to raise cash to
meet monetary obliga�ons. Valero looks to become a poten�al buyer of
Sunoco at a price $2 billion and a 36.4% stake of Sunoco. Sunoco is a
limited partnership that distributes motor fuel to convenience stores,
independent dealers, commercial customers and distributors. Looking
ahead, Valero has the poten�al to buy Sunoco, allowing them to grow as a
company.
WTI Use
March 13��, 2016
Valero’s Lowdebt of equity of 35.9% is likely to outperform as Oil
Prices Rebound. Valero is buying West Texas Intermediate oil around
the price of $38.67 a barrel. Compared to Brent crude oil, that is selling
at around $40.50. Valero buys the cheaper of the two, WTI and refines
that oil to a be�er quality. The cheaper WTI becomes in rela�on to
Brent, the more profits Valero makes.
Page 3 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct
4. Valero Energy Corp
VLO
Investment Growth
Time Period: 3/1/2011 to 2/29/2016
8/2011 2/2012 8/2012 2/2013 8/2013 2/2014 8/2014 2/2015 8/2015 2/2016
-50.0%
-25.0%
0.0%
25.0%
50.0%
75.0%
100.0%
125.0%
150.0%
175.0%
200.0%
Valero Energy Corp 138.8% Chevron Corp -3.6% Exxon Mobil Corporation 8.0%
Competitor Comparison
Revenue
(mil)
Revenue %
Chg
Gross
Profit
(mil)
Gross
Margin %
Net
Income
(mil)
Net
Income %
Chg
Net
Margin %
Market
Cap
(mil)
(Daily)
Current
Ratio
Receivable
Turnover
Valero Energy Corp
Chevron Corp
Exxon Mobil Corporation
138,477.00 -34.67 45,692.00 33.00 4,587.00 -76.16 3.31 183,965.54 1.34 9.24
268,882.00 -34.73 80,614.00 29.98 16,150.00 -50.34 6.01 349,662.11 0.79 11.23
87,804.00 -32.89 13,153.00 14.98 3,990.00 9.92 4.54 30,650.79 2.03 18.40
Competitor Comparison (Cont.)
Asset
Turnover
ROA %
Total
Debt
to Total
Equity
ROE % Beta 5 Yr
P/E
Ratio
Forward
PEG Ratio
P/B
Ratio
Current
Dividend
Yield %
TTM
Free
Cash
Flow /
Sales %
TTM
Valero Energy Corp
Chevron Corp
Exxon Mobil Corporation
1.95 8.88 0.36 19.37 2.02 8.36 13.27 1.49 2.92 4.55
0.52 1.72 0.25 2.98 1.09 23.15 0.93 1.20 4.38
0.78 4.71 0.23 9.36 0.86 20.83 2.26 2.05 3.47 1.43
Industry Environment:
The energy sector is extremely volatile. Largely dependent of the price of oil, specifically WTI and Brent, the
energy sector is at the hands of OPEC as they ultimately control the production threshold for the world. With
constant fluctuations in oil prices, especially as of late, stock prices are directly affected, so dramatic swings
are common for this sector. As a whole, the energy sector has been lagging down the S&P. However, the low
oil prices, especially with WTI are a good thing for Valero. This is because they purchase WTI to refine and sell
it at a level of Brent crude, which is slightly higher. By investing in Valero, we feel that oil prices are going to
remain relatively down in relation to past prices, which allows Valero’s margins to increase as they are
spending less on oil.
Page 4 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct
5. Valero Energy Corp
VLO
Strengths:
Dividends: Annually, dividends have been increasing rapidly. On
a fiveyear comparison of previous years, the Dividends per
common share have risen from $.30 in 2011 to $1.70 in 2015.
Currently it is si�ng at 4.02% payout and is expected to
increase, with an expected dividend of $2.40 for the year,
assuming no increase or decrease in the most recent payout.
Refining oil: Embraced and adopted the idea of trying to
become more than just a gassta�on company that offers
Gasoline and Diesel. Valero is striving to maximize the most out
of our limited fossil fuels. Refining oil has allowed Valero to
produce Jet Fuel, Renewables, Asphalt, Propane, Sulfur,
Naphthenic Oils, Solvents, Aroma�cs, Natural Gas Liquids, and
Petroleum Coke. The Renewables consist of recycling animal fat,
used cooking oil and corn oil to produce diesel fuel. With a wide
range of products, Valero has tremendous capabili�es of
become a driving force in the fossil fuel industry. On top of this,
they were able to tremendously improve their margins on
refining, something that is expected to con�nue with lower oil
prices.
Weaknesses:
Vola�lity: Being in the oil industry, Valero is suscep�ble to
fluctua�ng prices. This affects a variety of areas for them from
the price of their oil contracts to the price that they can charge
at the pump. However, they are more than capable of dealing
with lower oil prices, and we as a group believe that they are
going to be more greatly affected if oil prices rise significantly
over the next year.
Decreasing Oil Prices: As oil prices have gone down, the margin
for profit has also gone down. As seller of gasoline at sta�ons
around the US and UK, the lower price means that they have to
sell more in order to make a profit. Being heavily dependent on
volume is risky as OPEC can greatly increase or decrease supply
in a ma�er of moments.
It is key to keep in mind that both of these weaknesses are
present for ALL companies that are in the energy sector and are
not exclusive to Valero.
Opportunities:
With oil being so low this is a good chance for Valero to
stockpile oil on favorable futures contracts. Also The Diamond
Pipeline will provide the Valero Memphis Refinery with price
advantaged domes�c sweet crude oil from Cushing, Okla., which
will enhance the refinery’s longterm viability for the produc�on
of gasoline, diesel and jet fuel for the greater Memphis and
eastern Arkansas area and provide economic benefits to the
areas along the route. Another opportunity is that they are
expanding into expor�ng ethanol to Asia and Brazil. The low
stock price is allowing them to have an opportunity to buy back
$1.3 billion of common stock back, showing that they are going
to invest more in themselves during the �me of low oil prices.
Threats:
The price of oil is very vola�le which may lead some people to
ques�on inves�ng in the energy sector. With Valero being in
the refining as well as ethanol segments the risk that is
associated with being in the energy sector is minimized. Also
there are many big names in the energy sector to compete
against, with that being said Valero is the best pick because of
their ability to make money in an unstable market. Since they
deal outside of the US, they are subject to foreign exchange rate
risks, but do hedge them by using an Economic Hedge, using
foreign exchange and currency contracts to lock in on USD
amounts. For example, in the first quarter of 2016 already, they
have had a $10 million gain.
Page 5 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct
6. Valero Energy Corp
VLO
Valuation: Discount Cash Flow Model (DCF)
We got a DCF value of $211.16. This is a number that is not very accurate, but it is due to the
volatile cash flow of changing revenues and free cash flow, due to the volatility of oil and cash
flows, specifically WTI.
Valuation: Discount Dividend Model (DDM)
We got a DDM value of $68.81 which is fairly accurate, based on the current price that is in the
$60's. Valero has been paying a rapidly increasing dividend that we expect for the next few years
as a short term play due to a rise in oil prices. In to perpetuity, we expect it to level out at a
modest growth.
Valuation: Multiple Valuation
Our most accurate valuation for Valero was the Multiples valuation. Our group used the Price/
Earnings Multiples Method. We took the projected EPS from CapitalIQ and mutiplied it by the
average growth in dividends that is projected. For 2016, we got an intrinsic value of $75.05, with
projected values of $76.57 in 2017 and $80.97 in 2018.
Page 6 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct
7. Valero Energy Corp
VLO
Sources Cited
www.Finance.yahoo.com
www.CapitalIQ.com
www.Nasdaq.com
www.The Street.com
www.cnbc.com
www.valero.com
www.eia.gov
Bloomsburg Investment Group Disclaimer
This report was developed by student members of the Bloomsburg Investment Group (BIG). The purpose of the
report is to provide research analysis of securities to potential and existing donors of The BIG Fund. The report is
designed to exemplify the abilities of our members through investment research and analysis. Analysts of the
Bloomsburg Investment Group and The BIG Fund are not registered brokers, investment advisors, or licensed
financial professionals. The generated opinion of our analysts is not an offer or solicitation to buy or sell any
security, and due diligence is recommended before making any financial transaction. Information included in this
report was compiled from different public sources. Not all relevant data was included into the report, and accuracy
is not guaranteed. Students, faculty, and staff of Bloomsburg University may have a financial interest in any
company listed in this report.
Disclaimer: Our group has projected that the oil price for the next year, both Crude and WTI will range between $25 and
$52.50 a barrel. We project this based on eia.gov's 2 year projections for both Crude and WTI, which have them bottoming out
near $35 and peaking around $50. Due to unrest with OPEC and production, our group feels that oil prices may dip to near $25
if overproduction becomes extreme, which also means that our projections won't have a significant jump over current prices
unless an extreme event occurs.
Page 7 of 7US Dollar3/21/2016 Valero Energy Corp
Source: Morningstar Direct