Valero Energy Corporation (VLO): Today's Featured Basic Materials Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Valero Energy Corporation ( VLO) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day down 0.9%. By the end of trading, Valero Energy Corporation fell $1.93 (-6.2%) to $29.47 on heavy volume. Throughout the day, 19.2 million shares of Valero Energy Corporation exchanged hands as compared to its average daily volume of 9.1 million shares. The stock ranged in price between $29.32-$31.40 after having opened the day at $31.29 as compared to the previous trading day's close of $31.40. Other companies within the Basic Materials sector that declined today were: Ferro ( FOE), down 24.2%, Lizhan Environmental ( LZEN), down 18.9%, Energy Services of America Corporation ( ESA), down 10.2%, and Samson Oil & Gas ( SSN), down 8.8%.
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Valero Energy Corporation operates as an independent petroleum refining and marketing company. The company operates through three segments: Refining, Ethanol, and Retail. Valero Energy Corporation has a market cap of $17.49 billion and is part of the energy industry. The company has a P/E ratio of 10.8, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are up 49.2% year to date as of the close of trading on Tuesday. Currently there are 10 analysts that rate Valero Energy Corporation a buy, one analyst rates it a sell, and four rate it a hold.

TheStreet Ratings rates Valero Energy Corporation as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, increase in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, AuRico Gold ( AUQ), up 20.6%, Keegan Resources ( KGN), up 16%, Pure Bioscience ( PURE), up 15.6%, and HyperDynamics Corporation ( HDY), up 6.1%, were all gainers within the basic materials sector with Royal Gold ( RGLD) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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