Refineries

I have been reviewing the refiners a bit as a follow up to my posting last night. I think it really comes down to:

1. HFC
2. MPC
   

HFC is actually an MFI stock currently and I have owned them in the past as FTO and HOC. I have HFC at #212 on my overall list and they will likely break into my weekly top 200 post earnings on February 28th as their expected earning are over $1 per share versus 14 cents a year ago. They are a well-run company and have a solid balance sheet. They pay a 10 cent quarterly dividend, which works out to 1.2%, but they announced a special 50 cent dividend the other day (HollyFrontier Corporation Announces Special and Regular Cash Dividends), so I would add them to my dividend portfolio.

MPC is a spin-off from Marathon Oil this past summer. So they are a chapter from Greenblatt's first book. Unfortunately, they were not on my radar screen earlier and they have bounced from a low of around $26 to low 40s. They still look cheap at $43.81. They are about #300 overall on my list, but that is with a weird 3rd quarter where they lost money. Even with that, their EY is 24% and they pay a 2.3% dividend. So they would clearly be in my dividend portfolio.

The 3rd possibility (which I have not listed) is CVI. I show them about #160 on my top 200, so formula-wise they are tops. But I do not see them on "official" list. They expect to earn 38 cents this quarter vs 14 cents a year ago, so they are moving up. The interesting thing about CVI is that they are "in-play". Carl Ichan has made a hostile bid on them at $30 a share (Icahn make $2.6 billion hostile bid for CVR Energy). Hard to say where this goes, but that seems like a pretty cheap offer. I think they could move towards $40 if others get involved in bidding.