Market Overview

5 Refining Names to Potentially Buy After Sunoco Deal


On Monday morning, petroleum refining and marketing company Sunoco (NYSE: SUN) announced that it had agreed to be bought out by Energy Transfer Partners (NYSE: ETP) for $5.3 billion in shares and cash. The acquisition price on a per share basis, works out to $50.13 per SUN share. During Monday's trading session, SUN has soared 19.51% to $48.89. The discrepancy between the deal price and SUN's current share price represents the market's uncertainty of this deal successfully closing.

In the wake of the M&A activity in the refining and marketing space, Benzinga decided to look for some other long ideas that could benefit from heightened deal speculation in the sector. The metrics that were used to seek out potentially attractive long plays in the refining and marketing space were stocks that are currently yielding over 2% and are up at least 10% in 2012. Out of the more than 30 names in this market sub-sector, five names met the screening metrics. Below, Benzinga outlines these securities.

Calumet Specialty Product Partners (NYSE: CLMT) - This energy company is seeing some increased activity in the wake of the ETP/SUN deal on Monday. At last check, shares had added 1.24% to $27.35. CLMT has been in a very strong uptrend throughout 2012 and is sitting very close to new 52-week highs. Year-to-date, CLMT has added almost 36%. The security is also yielding 8.30% at current levels.

Marathon Petroleum Corp. (NYSE: MPC) - Shares have surged in 2012, but are trading below recent highs of around $45.00. On Monday, the stock has added 1.04% to $41.72. Year-to-date, shares have risen more than 25%. At current levels, MPC is yielding around 2.40%.

Ultrapar Holdings (NYSE: UGP) - This stock is trading within the vicinity of 52-week highs, but is down very moderately on Monday. Ultrapar is a Brazil-based company which trades on the New York Stock Exchange as an ADR. Year-to-date, shares are up better than 31%. Shareholders also benefit from the company's dividend, with UGP currently yielding around 2.61%.

Valero Energy (NYSE: VLO) - This well-known refiner is having a strong 2012, with shares rising around 17%. Despite the rally, VLO is currently trading roughly $3.00 below its 52-week high. On Monday, the stock has fallen 1.95% to $24.63. Valero is currently yielding around 2.44%.

Crosstex Energy (NASDAQ: XTXI) - This small-cap name has added nearly 18% in 2012 and the stock is trading in the general vicinity of 52-week highs. The Dallas-based company is focused on the natural gas market and currently has a market cap of $706 million. At current levels, the stock yields 3.22%.

Posted-In: Long Ideas News M&A Trading Ideas Best of Benzinga


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