Revisiting VLO as the stock trades at a PE of less than 8 based on the $8 earnings estimate for 2006. I am also hearing that there is a general refining capacity problem which will only make the earnings at VLO and other refiners higher. Analysts are also assuming EPS of $7 for next year and I have no clue why they think the prices of oil and refining will come down. Seems as if the only commodity that held up during the commodity crash of 6 weeks ago was "terror premium driven" crude.

Technically there looks to be lots of overhead resistance on VLO at the 64/66 level so if it gets through there it could be clear sailing to new highs. Also if you look at the charts on OIH/XLE, it looks as if the oil stocks in general have bottomed.


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