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.
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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