Reg. WNR, some tidbits from an old free sample issue of Jim Grant’s Interest Rate Observer from way back in 22-sep-06, but first his more recent opinion I gleaned from a teaser in his “Grant Dispatch” free email of 11-jan-08: (WNR was around $19):”… We were bullish at $20 two Septembers ago and mute at $66 last July. Now that the stock is back to $20 (actually, a little lower), we've returned to the scene of the analysis: We're bullish all over again. Just to judge by the collapse in the share price, you'd never suppose that [this company] has boosted its . . .capacity by 70% . ..”
His writeup in the 22-sep-06 newsletter was:
Western Refining:WNR (was around $21): soon to be #4 publicly traded independent refiner. As energy prices fall and crack spreads (i.e. refining margins) break, WNR is quietly building for the future. With recent acquisition of Giant Industries, capacity expanded by 84%. In refining industry no new significant capacity added in 30 years. The bottleneck between crude supply and gasoline supply is a gift to every existing refinery. WNR execs are big stockholders themselves. WNR went public Jan06 @17. Even after IPO mgmt owned 60% worth $800 million. CEO’s stake itself worth $600 million (he extracted $35 million at IPO). Insiders have been buying between 21 & 27. Gross margins been climbing from 2003 from less than $5 to $15. Katrina compounded the chronic shortage of refining capacity. Not much relief in sight. DOE projects over the next 10 years 10% rise in refined product consumption will be met with a 6% rise in refining capacity. Utilization rate currently around 90% so effectively maxed out. WNR used IPO proceeds to pay down debt.
I got many profitable ideas from his monthly newsletter which alas costs plain too much. But there was a time I could read it free at the San Francisco Public Library who still subscribe to it but now I no longer live in the SF bay area.
