CVR REFINING (CVI)

[michaelmerriman]

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.