Tesoro Corporation Stock Buy Recommendation Reiterated (TSO)

NEW YORK ( TheStreet) -- Tesoro Corporation (NYSE: TSO) has been reiterated by TheStreet Ratings as a buy with a ratings score of A-. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 13.3%. Since the same quarter one year prior, revenues slightly increased by 3.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.04, which illustrates the ability to avoid short-term cash problems.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, TESORO CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Powered by its strong earnings growth of 71.79% and other important driving factors, this stock has surged by 114.59% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TSO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

Tesoro Corporation, together with its subsidiaries, engages in refining and marketing petroleum products in the United States. It operates in two segments, Refining and Retail. Tesoro has a market cap of $7.1 billion and is part of the basic materials sector and energy industry. Shares are up 15.1% year to date as of the close of trading on Tuesday.

You can view the full Tesoro Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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