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More info. Looks like new CEO of CVR Energy is consolidating. Can't blame him. Why pay for two headquarters, two admin structures, etc. when the MLP easy money appears to have dried up?
I still have a grudge against Icahn though.
https://www.bizjournals.com/houston/news/2019/01/18/cvr-energy-to-roll-up-refinery-mlp.html
Wow. I bet there are some pissed off stockholders who purchased at the $12-$17+ range who were hoping for a slow price recovery or years of divvies to recoup losses. Why this thing is still trading above 10.50 is a mystery.
Just another big "F YOU" from Icahn to unit holders. I hope people wise up to his scams and STAY AWAY FROM ICAHN STOCKS.
I think the major concern for most is the 2020 bond failure risk.
Customers, sales, and margins increased YOY with the help of weather (its colder this year) but administrative costs increased hand in hand so its a wash despite the weather-enabled good fortune with sales, and oil price related margin increase (both of which are not guaranteed moving forward)
These guys may survive, if so they are probably deeply undervalued, but no one is likely to trust this stock enough to put serious money into share price growth for a long time considering others in the sector have shown much more consistent results. Everyone that bought for div yield is gone too, which in the MLP space is basically everyone.
Share price this low means risk of NYSE delisting also...
My two cents.
Bad news, bad news, desperate sounding earnings report, looming bond failure for 2020, div is cut.
Half of the people still selling probably have $5.00 plus cost basis and just want to get the hell out of dodge. If my holdings were in a taxable account you sure as hell better believe the tax writeoff is worth more than any hope of future growth.
These guys screwed the pooch buying an $800 million dead in the water flop from a scamming company in the name of diversification. $15/share down to $1.14 last check. Investor confidence is GONE.
At this point I keep it in my portfolio just to remind myself of the lessons learned.
Seems like what we talked of here at the end of May is coming to pass and some stakeholders are not happy.
press release here
I gave up on this stock and Icahn's shenanigans a while ago but posting this here for anyone interested.
I would say someone is doing heavy short term trading on the news of Hurricane Harvey knocking out some Houston refining capacity. This leaves OK refiners at an advantage. Still, this is trading on news and playing off of assumptions of the people that don't know really understand the downsides of owning this stock.
An easy way to milk a 4-5% short term gain out of an otherwise garbage price trend and company fundamentals breakdown.
Just read this article and thought it may interest others in the merchant refiner sector to know that RIN costs are increasing.
Though I still have no position in CVRR I am sharing this here.
Quick article from seeking alpha relating to CVRR's RIN positioning.
Read it here
Also this makes mention of the "growing talk" of a CVRR & Delek merger but I wouldn't necessarily consider it a credible source. There was an email subscription requirement to view the full article so I've copied and pasted it here to save everyone the trouble.
Might have something to do with the run-up last Friday?
CVR Refining, Velocity Midstream to build Oklahoma oil pipeline
Do you think this is just useful for revenue generation and sourcing cheaper feedstock or would they be able to transport their blended fuel output to help reduce their RIN obligations as well?
I'd imagine that this JV project will require a significant capital investment and affect cashflow before it is up and running and therefore be another factor negatively affecting distributions in the ST but LT it is probably a good play.
More chatter on a seeking alpha news blurb.
After Hours Gainers Losers
Block of 4m CVRR shares sold near close, back down 10% after hours.
"The gasoline crack spread, a measure of gasoline margins, jumped as much as 17.8 percent on Friday to its highest level since June 6."
Gasoline futures soar, retail prices up as Colonial woes persist
Might have had something to do with it along with the momentum this stock was already experiencing. Big pipeline feeding gas to the northeast down has futures spiking. How are your other refiner picks behaving?
I'd imagine a ST snapback to the downside come next week though after this crazy move today.
IEP dumps 250,000 shares today. What do you all make of this? Seems awfully fishy to me.
SEC Filing
CVRR Lifted to “Strong-Buy” at Zacks Investment Research
As seen here.
With the earnings coming up before open on Thursday of next week (4/28) should we assume this is a positive sign? A $14 price target isn't that impressive but is a decent upside in the short term.
Oil has stabilized and seems to have bottomed earlier this year, and I expect a slow and gradual ride up from here as higher cost producers eventually shut in and reduce this glut of over-production a bit more. Oil's ride up, however, has little to do with the success or margins of refineries, and the Brent-WTI spread that seems to have a positive correlation with distribution values is basically negligible at this point. (Even though CVRR supposedly sources their crude at significant discounts to WTI)
In the short term I see a positive macro-economic environment and an overall rise in oil prices likely to drive this stock higher if only due to positive movement in the index funds and ETF's in which CVRR is included. I have no idea if the earnings call will deliver good news or not but reading through recent SEC filings shows Johnathan Frates from Icahn Enterprises was appointed to the board of directors. I'm going out on a limb and assuming that he does the bidding of Icahn, but without knowing Icahn's current holdings regarding IEP, CVRR, UAN, and CVI it is again unclear if having another Icahn man on the board is good for distributions or not.
I for one still do not own any shares, but I may consider taking a small bite for a short term ride after looking at a few more technical indicators.
CVRR breaks 52-week low.
Those of us on this board already knew that, but I did find the analyst EPS estimate they quoted rather interesting:
I've been keeping up with everything I can get my hands on regarding this company for over a year now, thanks in part to the great posters on this board (though I've only posted here a time or two during that period) and have been studying the macro picture of this oil price decline as well and have to agree with you that there is more downside than upside for CVRR valuations at the current moment.
It seems that most people buying the stock now (or promoting the stock through articles like this one are out of touch with how this refinery MLP operates and how it is affected by the broader oil macroeconomic environment. I posted this response in the comment section of the link above, but find it relevant enough to those reading here to repost it:
2Q15 Results to be announced July 30th, 1pm eastern.
So far I've been more of the "buy and hold and let the divvies add up" type, but I'm aware that when I've clocked a decent gain sometimes it's good to walk away. What do you think would be a good spread for a trailing stop loss on this stock? It's just so volatile, I've seen it drop 4% one day then go up 5% the next purely on macroeconomic news. Daily highs/lows can have a super wide swing. Seems to be driven more by bipolar oil sector ETF trading than anything related to company performance most days.
I don't like this stock anymore.
Carl Icahn declares 13F filings one day before earnings release, showing that he exited his CVRR position, shifting them to CVI and IEP instead. I thought that it could have been more of a tax-loss selling play and less of a "writing on the wall" thing but I was wrong. Icahn did what he does best and got out while the getting was good, and us Regular Joes just get to feel played.
I understand the recent squeeze on margins but 16 days of "technical difficulties" at the Wynnewood refinery after issues with a damn fire the quarter before... They are obviously doing something wrong.
Q1 2015 might be better. MIGHT.
Sold about a third of my shares today to lock in some gains. It will probably keep climbing until the 19th, but after seeing red for so long I had to get some green out of the game while I had the chance.
I think the steelworkers strikes that have hit the other refiners makes CVRR'S lack of labor disputes look better by comparison. Also, I've noticed gas prices are about 30 cents higher per gallon in my area compared to a month or two ago, despite oil's $/bbl being at the same levels. Whether it's increased demand for gas or what, it looks like gasoline sellers in my area at least put a little padding into their prices. Probably bodes well for refiners, but that means nothing for the Q4 earnings, and I think the expected distribution is really the main driver of this current valuation uptrend.
4Q results to be announced Feb 19th, before market open. Conference call at 1pm eastern. In two weeks we can hope to have a little more clarity on how they've weathered the storm so far. Hoping for good news. I predict this stock making a decent run up to the announcement.
Let the fun begin!
details here
I bought in around these prices early January and you, having weathered your tax-related waiting period, are no worse for the wear buying now. If anything you've benefited from witnessing that the bottom has set in and the stock has been able so far to maintain a pretty steady climb out from the depths.
Up, up and away we go! Until the earnings release at least...
Oil may not have bottomed yet but in the shorter term, I believe this stock has. I do agree with most of your conclusions on the crude oil front, though. If the USD remains strong, oil prices will be hard-pressed to return to their $100+/bbl days. I'd even be surprised to see $75-80/bbl return until this US bull market weathers a bear and rises again. The bull can't run forever and a serious correction will certainly drag oil prices down with it.
This is a company I have spent a good deal of due diligence looking into, and have been pretty confident that the stock would sooner or later rise significantly towards normal "pre-oil crash" valuations. However, the combination of a tremendous lack of visibility into the next quarterly earnings results and the inherent chaos that a Mr. Market in search of ever-growing dividends could wreak upon a variable-pay MLP stock who offers up a lower than expected distribution has presently made me a more cautious investor.
Add in the extreme bottom in the $13's from $24's this previous summer or even this autumn's $21 offerings (which looked very tempting at the time might I add) Not to mention trading down from $17.46 high Jan 12th to a low of $13.37 two days later, Jan 14th, essentially dropping 25% in two days on nothing but a whisper of semi-related world-news or government reports. I've been keeping a good eye on this stock as well as the macro environment for oil and if I can't explain a drop like that in this stock, then it can be worrying. I don't like to buy what I can't understand, but that's just my approach.
The majority of people that have been buying this stock through January have not been trading for any perceivably rational reason, as the volatility demonstrates. Most investors are afraid to touch energy stocks (oil) now and I'm not sure when that fear will wear off. Until then a reduced demand for this stock will certainly drive down unit prices.
A tempting yield, however, will drive that demand up. I'm not an industry insider but everything I've read points to CVRR announcing a sizable quarterly distribution, after which I might liquidate a good amount of shares at a profit and re-assess my portfolio. I'm currently overweight energy stocks and don't require dividends for income as I'm operating in tax-free retirement accounts with a long time-horizon for growth. Minding these MLPs has been a great learning experience, though!
Always happy to read everyone's insights, and I thank everyone for sharing them.
8% in one day off of no company news and very little macroeconomic-related changes likely means a nice drop off again tomorrow after today's rally. I'd prefer to see a slower climb back to reasonable valuations as this volatility won't really help investor confidence.
My cost basis is around $19/share from summer buying and buying at the start of this year, though after dividends received are factored in I'm not looking at a terrible loss so far.
Let's see some good cash flows and low expenditures with a decent div payout for this next earnings report and I'll be in the green again soon enough. The waiting game is killing me in the meantime, though.
I sure hope so.
Eagerly awaiting Q4 earnings and div announcement to see how this all shakes out.
It's no fun eating crow but getting to the $19 or higher we hoped for is certainly less likely now in the short to medium term than I had hoped for when buying at the start of this year. Jumped the gun, without a doubt, but who would have expected something like a negative Brent-WTI spread?
My advice to anyone interested in the stock: wait for oil to bottom and catch this stock on the way up. Until then, everyone is running scared from the sector and there might be more downs than ups for a while here.
I don't think the discount is sustainable, but if anyone is looking for some writing on the wall in the macro sense, this oil-price bust does reflect investor concern over global demand, and the strength of the dollar right now will affect US multinationals' overseas earnings as reported in USD, leading to some serious disappointment. I'd be very surprised if the bull market makes it to 2016.
But when the only investment vehicle with a decent yield is securities where else can you put your money? The only move is to make sure you BUY 'EM CHEAP.
Brent trades at discount to WTI
...and this has traders scared, hence the drop to the 15's. Probably more downward pressure to come as these drops worry stockholders.
The question is... what is it going to take to bring this back up?
Nobody wants the stock. Will that change with a good distribution? I think oil will have to bottom before it makes a serious run back up to expected valuations. Is the future income from distributions, especially at this entry price, enough to justify the lack of liquidity?
Jugs, does your experience with ALDW's past behavior mirror this current CVRR phenomenon at all?
Carl Icahn through IEP and CVI has stakes in 58% of the earnings distributed, with even more influence on the behavior of the company, and I'm sure that he'll keep the distributions coming and do his best to prop up valuations before he even thinks of selling!
He knows that his selling of shares would tank the value (as seen last summer), so we even have a bit more opportunity to make smart plays with the stock than he does.
If these ratings changes have any influence on unit price, buy the dip
At least Credit Suisse has a reasonable reason for a downgrade.
Credit Suisse Article Here
TheStreet.com Rates CVRR Sell
Article Here
Hey everyone, I've been watching this board for awhile but never had much to add until now. Recently purchased more CVRR today as I feel these shares should recover pretty nicely approaching the next earnings report and dividend. Wish I could have caught it in the low $16's but oh well.
I don't think the refiners are as affected by low oil prices in the short term as everyone thinks, and I've actually read some evidence that refineries benefit more as oil prices drop due to the lag between raw material cost and refined product pricing. One source claims that about 28% of CVRR Q4'14 production to be hedged at a hefty $27.25/bbl margin, and estimates a $0.625/unit distribution for Q4. I think that's a pretty solid payout that would bring investors back to the stock and increase unit price.
Earlier today CVRR filed an SEC document with an investor presentation (EX-99.1) that outlines some of their hedging and crack spreads going into 2015... Seems to be about 10% hedged at a margin of $24.61/bbl for the year.
I'd love everyones take on the presentation, specifically the hedges on pg 14 and YOY capex increases on pg 16. I'm not sure the Q1'15 hedge and spreads are going to be enough to deliver the kind of distribution everyone will be expecting, but Q4'14 should still surprise most and offer a lot of upside if the capex doesn't cut into the distro.