Valero Energy: Hold shares

Posted Nov 3rd 2009 3:00PM by Joseph Lazzaro
Filed under: Valero Energy (VLO)

For now, I'm placing a Hold on Valero Energy Corp. (NYSE: VLO) shares, first recommended on April 20, 2009 at a price of $20.08.

Valero, the largest, independent refiner in North America, continues to underperform, as a result of the decline in demand for refined products triggered by the recession.

Longer-term, VLO has the economies of scale and proficiency to win where others have failed in the refinement of lower-quality oils. The First Call FY2009/FY2010 EPS estimates for VLO are a loss of 72 cents to a profit of $1.46.

However, until the stock breaks out of a bouncing-along-the-bottom pattern and demonstrates the ability to remain above the key, 50-day moving average, the advice is to stand aside.

Stock Analysis: Don't Buy Valero Energy's shares at at this time. If you bought shares in April, Hold the shares. Sell/Stop Loss: $11.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Tags: VLO