CVR REFINING (CVI)

[michaelmerriman]

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:

Analysts await CVR Refining LP (NYSE:CVRR) to reports earnings on February, 18. They expect $-0.48 EPS, down 250.00% or $0.80 from last year’s $0.32 per share. After $0.94 actual EPS reported by CVR Refining LP for the previous quarter, Wall Street now forecasts -151.06% negative EPS growth.

That scheduled maintainence downtime, reduced throughput, collapsing (sometimes inverted) crack-spreads and gas prices sure did some damage to earnings. I wonder if other investors are just now catching on to what we've known for some time: this quarter the valuation had nowhere to go but down.

Along with sector-wide ratings downgrades in oil & gas, including bigger names like CVX, the market sentiment for this sector has been very pessimistic even for large-cap midstream, downstream and integrated players like PSX, XOM, and BP which had otherwise weathered this oil-price collapse rather well but are now reporting billion-dollar losses and extreme capex reductions.

A commenter in a seeking alpha article I read a few weeks ago believed that CVRR had set aside enough cash in anticipation of the downtime to maintain a relatively high distribution this quarter, but if the EPS estimates are close to true it would be hard for them to justify a high payout in this environment. I'd guess $0.50 or lower even with the cash supposedly set aside. If I were Carl Icahn though, I would load up on shares around this time and push for a surprisingly high payout and optimistic forward statements from the company then sell the rally for a quick high-yielding buck but that just the Icahn cynic in me talking.

We'll see in a few weeks how it all plays out. In the meantime my CVRR share count is 0.