February 17, 2005
SpeculatingStocks.com Stock Pick: Alon USA Energy Inc. (ALJ) Alon USA Energy Homepage
Stock Price: $19.30 (short-term strong buy)
"Alon USA Energy is a profitable Texas based independent refiner and marketer of petroleum products. Over the first three quarters of 2005, the company generated revenue of 1.646 billion. Based on this and estimated fourth quarter results, ALJ is trading at a price to sales of only 0.41."
Industry: Oil & Gas Refining & Marketing
Market Cap: $903.18 million
52wk Range: $17.05 - $26.50
Shares Outstanding: 35.0 million
Shares in the Float: 8.0 million
Alon USA Energy News
Another oil and gas play!
Alon just sold $68 million in oil pipeline holdings to Sunoco logistics. This deal strengthens an already strong balance sheet. Current assets exceed liabilities by a margin of 2.29 to 1. On the latest balance sheet, cash and cash equivalents came in at over $193 million. $5.51 cash per share. Stockholders equity is currently at $249,749 creating a book value of $7.13.
This is one energy stock that the market has yet to inflate. Last quarter, revenue came in at $648,135 with a profit of $24.39 million. Fourth quarter results are due out on March 7 after the bell. ALJ deserves more attention than it has been receiving, it is near its 52-wk low and trading at a low P/E compared to its peers. The company also enacted a $0.04 regular quarterly dividend on February 15th. We expect this and the current valuation to garner institutional investors.
Part of the reason ALJ may be undervalued is that the stock just had its IPO in late July of last year. Within two months of ALJ's IPO, its shares hit $26.50. ALJ loves to move off of its current level. Record revenues are expected as ALJ continues to generate higher revenues quarter after quarter.
We placed a short-term strong buy on ALJ, but long-term it will be a significant performer in its industry.
SpeculatingStocks.com Target Price: We expect ALJ to reach $24.00 within the next month.
We will be following ALJ's progress within Stock Updates.