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America’s reliance on imported oil is fading fast as domestic output soars. (PORT OF CORPUS CHRISTI)
America’s reliance on imported oil is fading fast as domestic output soars. (PORT OF CORPUS CHRISTI)

Research Report

O'Shaughnessy-based model likes this inexpensive oil refiner Add to ...

Validea’s pick of the week provides a detailed report on a company that scores well in the stock-screening service’s model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.

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Texas-based independent petroleum refining and marketing company Valero Energy has a $29-billion (U.S.) market cap. It boasts a 15-per-cent return on equity, versus 0 per cent for the oil and gas operations industry.

The company has $6.1-billion in net current assets versus $5.9-billion long term debt, which the Benjamin Graham-based approach likes.

It gets strong interest from the James O'Shaughnessy-based growth model, which likes that its relative strength is 77, suggesting investors are just starting to embrace the stock, and cheap, with a price-to-sales ratio of 0.21 times.

Valero has grown EPS at a 30-per-cent clip over the long term (using avg of 3 and 4 yr EPS growth rates), part of why it gets strong interest from Peter Lynch model. The Lynch model also likes its 0.33 P/E-to-growth ratio.

The company has a 1.9% dividend, and gets some interest from the Ken Fisher-based model, thanks in part to its 0.21 PSR. It has a reasonable 33-per-cent debt/equity ratio, which the Fisher and Lynch models like.

 

John Reese is long VLO.

 

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