Valero Energy Corp (VLO) Buy, Sell or Hold

Valero Energy Corp (VLO)

236.29

-0.01 (0.00%)

as of Jun 18, 2026, 11:31:03 pm Market Open.

41 watching

WAIT

He is very positive on refining. This is a bear market but on a longer time horizon the assets should be worth an awful lot. There is excess refining capacity right now. On a 2 or 3 year basis, it's a great time to buy. However, this one can go a lot lower.

COMMENT

Has been caught up in the squeeze on refinery margins. With the current retreat of crude, refinery margins might improve so there could be a bit of a bounce back. You could get more protected exposure through Petro-Can (PCA-T) or one of the integrateds in Canada.

BUY

Largest independent refining and marketer in the US of gasoline. Has suffered greatly as oil prices have gone up. Margins at the refining level and retail level has shrunk. Drop in oil prices is bullish for this company.

DON'T BUY

Spreads are not attractive enough to get into this stock. Would need $70-$80 oil. Service companies are a better option.

PAST TOP PICK

(A Top Pick July 27/07. Down 51%.) Everything has gone wrong for the refiners including refining capacity in the majors. As a value manager, his big concern would be a Value Trap. Once this one dropped its market cap on the S&P 500, he dropped its weighting. Still has value and great earnings.

DON'T BUY

Refinery. Has had a difficult time because of high oil prices and managing the mix between distillates and gasoline etc. Believes that oil is in a correction, not broken down. Difficult industry and margins are very tough to make. There are better places for your money.

BUY

A buying opportunity, but it is not going to turn around overnight.

DON'T BUY

From a profitability standpoint, refiners are in a difficult spot. They are geared to produce as much gasoline as they can but gas inventories are not tight. However, diesel inventories are tight. Crude prices continue to move higher.

HOLD

(Market Call Minute.) Too much gas inventory and high fuel prices means margins are weak.

PAST TOP PICK

(A Top Pick July 27/07. Down 39%.) Refiners are caught with demand for gasoline going down and the price going up. They also have to buy crude. Reduced his weighting from 5% to 1.25%. Model price is $79, a 77% positive differential.

DON'T BUY

Stock price is probably down due to quality of assets and quality of management. When you are buying, you might as well buy the leading companies. Also prefers Canadian companies to get the dividend tax credit.

DON'T BUY

Higher crude prices made it harder to get a margin on gasoline.

SELL

Refineries are really having a tough time here. His model price is $79.26, a 66% positive differential. He still has it but it is no longer in his Top 10. There is going to come a time when these companies will make nothing but money. Consider changing to Canadian companies. (See his Top Picks.)

COMMENT

Crack spread for a refinery is when they buy oil at X dollars and refine it (the crack) and sell it. The profit is the crack spread. Demand for gasoline has not been strong and North American economy has been weakening. This is a cyclical business and that will change. If you are a long-term investor you could take advantage of the weakness and Buy. Doesn't see relief in the near term but in the medium to long term there could be value.

BUY

Refinery. Stock has been hit hard as oil has gone up. An attractive place to be. Have a lot of assets and there are no new refineries being built in the US.

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Valero Energy Corp (VLO)