Report
Valens Research

HFC - Embedded Expectations Analysis - 2019 07 15

HollyFrontier Corporation (HFC:USA) currently trades near recent averages relative to Uniform Earnings, with a 10.8x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management is concerned about their debt levels, demand trends, and growth.

Specifically, management appears concerned about their current levels of debt outstanding, and they may be exaggerating their expectations for demand growth in the long run. Additionally, they may lack confidence in their ability to maintain their current cash balance, and they appear concerned about growth rates in their HEP business.
Underlying
HollyFrontier Corporation

HollyFrontier is a petroleum refiner that produces products such as gasoline, diesel fuel, jet fuel, other lubricant products, and specialty and modified asphalt. The company's segments are: Refining, which involves the purchase and refining of crude oil and wholesale and marketing of refined products; Lubricants and Specialty Products, which includes the production of lubricant products such as base oils, white oils, other products and finished lubricants; and the company's subsidiary, Holly Energy Partners, L.P., which owns and operates logistics and refinery assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and processing units.

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Valens Research
Valens Research

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  • GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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Many years later, our business model remains because little has changed on Wall Street.

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