A Quickie With HollyFrontier Corporation

My Disclaimer
I could waste a lot of your time with graphs, charts, and other assorted worthless information all intended to show you that I know something about something when it comes to this company. But the truth is, I don’t know squat about this company. What I can tell you about this company is that I am a shareholder.

My intent with this post is to provide you with a brief overview of my various valuations for the company, all based on their latest 10-K filing, so you can determine if you have any investment interest.

What They Do
HollyFrontier is an independent petroleum refiner that produces high-value refined products such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. Listed competitors include Valero Energy Corporation, Exxon Mobil Corporation, and Western Refining.

Short-Term Target
My short-term target for the stock is $62.51, with an initial trailing stop set at $51.25. With a recent price of $52.03, upward price movement will find resistance at $53.14 and again at $55.45, with breakout resistance coming at $57.71. Downward price movement will find support at $51.08.

Momentum Target
My momentum target for the stock is $132. Momentum targets are determined by overlaying a company’s most recent annual EPS, its year-over-year earnings growth, and the current yield of a 10-year treasury. Momentum investing often requires investors to trade in stocks that have already enjoyed significant gains while making no allowances for overall market corrections or the sustainability of a company’s earnings.

Growth Target
My growth target for the stock is $112. Growth targets are determined using a company’s year-over-year earnings growth, year-over-year PE growth, and year-over-year price growth.

Fair Value Investing
Fair value investing, more commonly known as value investing, requires investors to consider a company’s overall financial condition including past and future earnings growth, free cash flow, both book and tangible book values, net current asset value, and many other valuation metrics. For many fair value investors, the minimum required hold is five (5) years. My fair value estimate for the stock is $136.

Prior Average Valuations
My average valuation for the prior five year period of FY 2013 through FY 2017 was $56. Earnings during that time period averaged $5.12 per share.

Five Year Growth of $10K
If you had invested $10K in the stock five years ago (12/13), you would have received 201.25 shares of stock with a cost basis of $49.69. per share. Had you held the stock for five years and then sold it (12/18), you would have sold for $51.12 per share. During that holding period you would have collected $351.28 in dividends, and your initial $10K investment would have returned to you $10,639 or 1% per year.

HollyFrontier Corporation (NYSE: HFC) – FYE 12/2018 – UNDER VALUED The stock is currently trading at levels below my $82 initiate target. Please See Linked PDF Worksheet

There you are, as promised, short and to the point.

Wax
Posted on 03/01/19