Frontier Oil Corporation , with a rate of return of more than 2300% in the past decade, is an independent energy company engaged in crude oil refining and the wholesale marketing of refined petroleum products. In February 2007, the company bought Ethanol Management Company. The oil refiner has a 37.60% return of investment this year compared to a rate of return of 9.16%in the industry and 15.64% in their sector. Its low debt and consistent operating performance puts it ahead of its competition. Frontier Oil Corporation’s stock has an available covered call investing position clocking in...
Recurrent takeover rumors appear to be guiding the options action in Frontier Oil on last Thursday. There were trading 9 times as often to calls as to puts, consistent with the giddy action of a takeover rumor stock. This is an indicative of noteworthy action in the stocks in the near future.
FTO's refineries are built tough, with stainless steel catalytic crackers and cokers that cook the crud into gasoline, diesel, jet fuel and $30 a barrel in profit. It can refine oil from producers in western Canada which harder to be refined because it's gooey, acidic and high in sulfur. Last ye...
I added to FTO at $25.00. The refiners are getting hammered by high oil prices, but FTO's underlying valuation (PEG of .27) is very attractive. FTO has a 29.5% 5-year growth rate, $297m in cash vs. $150m debt, and is also a GS "Conviction Buy" with a $52 12-month target price. I don't expect $52, but I do think mid-30's is within the realm of possibility this year.
To beat the market investors need to find opportunities where they have a good chance to achieve above average returns. In recent years, refiners have benefited from the expanding crack spread that exists during the spring and summer months. As a result, they have experienced a seasonal rise in the price of their stock as demand for gasoline increases during the spring and summer months.
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