The Morning Trade

There is Value in Valero
Gregory BergmanNov 10,2020,15:59

The rotation is afoot. The rotation we in the markets have all been waiting for. That doesn't mean you sell all your stay-at-home stocks just because they are down; the 90% effective vaccine by Pfizer (NYSE: PFE) isn't so effective when 50% of Americans are about only 10% willing to take a vaccine voluntarily. Again, Zooming is the future and I am not willing to even look at REITs dedicated to renting office space. Some sea changes will persist long after the plague has subsided. Still, if you were waiting to buy stocks that are seriously undervalued, opting instead for big tech "security," now is the time.

There is value in Valero (NYSE: VLO). In a year or 18 months, it will double.

Valero Stock Ran Out of Gas in 2020

In fact, the San Antonio-based international manufacturer and marketer of transportation fuels, other petrochemical products, and power is down almost 61% this year.
Valero is one of the largest independent refiners in the United States. Demand has plummeted due to the pandemic making gas and jet fuel the last commodity anyone needs.
The company posted a net loss of $798 million in the first nine months. But that will change. And while the stock jumped $10 to $49 per share on Pfizer's vaccine news, the stock is still down from $95 per share at the beginning of the year.

In the Year 2021

There are a million ways to play the end of the pandemic buy buying oil and gas stocks, but Valero is one of the sector stocks I like best.

While not all analysts agree, the average price target for Valero is $58.26, which is about $10 above the current price. VLO currently has a public float of 406.27 million; the average trading volume of VLO was 4.66 million shares. Despite billions in debt, the company's debt-to-equity ratio and the inevitable turnaround in the economy and travel make Valero a value stock that will be a winner for patient shareholders willing to ride out the storm.

Disclaimer

The opinions expressed in this article do not reflect the position of CapitalWatch or its journalists. CapitalWatch has no business relationship with any company whose stock is mentioned in this article. Information provided is for educational purposes only and does not constitute financial, legal, or investment advice.

Topics:oil, gas, valero
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