Downstream oil firm HollyFrontier Corporation (HFC) put up one of the strongest performances in the pre-Thanksgiving trading session on Wednesday, leading a rally in the broader marketing and refining industry.
The previous day, the stock had crossed above its 200-day moving average on above average volume, a welcome event after shares for the company had struggled throughout the first half of the year. But while Hollyfrontier has added just shy of 7 percent year-to-date, the company enjoys a debt-equity ratio far below the industry average at 0.16, while its revenue growth has outpaced the industry average.
Furthermore, the company’s 5 refineries with a combined output of 443,000 barrels per day are expected to drive growth into 2014, given the proximity of the Dallas company’s operations to lucrative Texas plays. Last month, HollyFrontier got an upgrade from analyst firm Howard Weil from “sector perform” to “sector outperform”, a welcome event that coincided with the stock’s rebound off of a double bottom.
The $9 billion company has struggled with earnings and may continue to do so over the coming quarters, as a glut of recently constructed pipelines to the Gulf Coast have significantly impacted margins. There has nevertheless been a palpable bullishness surrounding the stock, and analysts are expecting on average a 5 percent growth in sales in 2014.
Ahead of Wednesday’s closing bell, HollyFrontier was trading over 5 percent higher, to as much as $49.16, putting the stock within $10 of its 52-week high.
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