I wrote on February 24th about whether the time had come to take profits on oil refining stocks like Tesoro, Valero, and others. (My conclusion was to hold the stocks for the time being, but to keep a close eye on them).
Since then, oil refiners have continued rising (generally), as oil prices have showed continuing weakness – especially in the last 30 days. Crude oil, of course, is the key input for refiners, so refiners benefit when its raw materials prices are low. Nymex crude fell below $50/bbl Wednesday, having fallen from $61 on June 23, 2015, and from $107 on June 20, 2014 (data from eia.gov).
Here's an updated table showing performance of selected refiners through July 22:
Does it sound strange to even think about "taking profits" on anything related to energy?
Well, oil refining companies' stocks have enjoyed quite a run this year. Check out this table summarizing recent returns for 5 selected stocks (total returns through 2/20/15, from Morningstar; returns longer than 1 year are annualized; "since Jan. 15" data from Yahoo! Finance):
If you haven't paid attention to this group, how surprised are you to see a group of oil-related stocks with positive returns over the past 12 months – let alone Tesoro's +82% performance?!!
I've also included the 3-, 5-, 10, and 15-year returns, just because they're so remarkable.
We wanted to follow-up regarding an exclusive report that we released on February 28th, entitled "This Undervalued Energy Stock Could Soar." If you registered to view this report, then you would know that this energy stock is up approximately 14.77% from February 28th's open price until yesterday’s close. Not too shabby!
Valero Energy Corporation (NYSE:VLO) may still have legs, as both fundamental and technical analysis suggested long-term gain.
We will be releasing INO.com friend and analyst, Wayne Burritt's latest report early next week. What will be the sector he's watching and is there a potential breakout stock? Please visit us early next week or sign-up for our blog alerts to make sure you don't miss our next exclusive report!