I'm Reiterating my Buy rating for Tesoro (NYSE: TSO), first recommended on April 23, 2009 at a price of $14.30. Tesoro's Q2 performance disappointed, but the New York Rangers will win the National Hockey League's Stanley Cup again before I'll sell a U.S.-based refiner.
Tesoro's strong U.S. west coast presence and recent facilities upgrades bodes well, moving forward, with revenue likely to ramp with the U.S. recovery. The First Call FY2009/FY2010 EPS estimates for TSO are a loss of 32 cents to a profit of $1.05.
Stock Analysis: Tesoro is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in TSO now; then buy another 25% in three months, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your TSO position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $17.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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