Trade-Ideas: Valero Energy Corporation (VLO) Is Today's Pre-Market Leader Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Valero Energy Corporation ( VLO) as a pre-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Valero Energy Corporation as such a stock due to the following factors:

  • VLO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $175.4 million.
  • VLO traded 35,358 shares today in the pre-market hours as of 9:29 AM.
  • VLO is up 2.7% today from yesterday's close.

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More details on VLO:

Valero Energy Corporation operates as an independent petroleum refining and marketing company. The company operates through three segments: Refining, Ethanol, and Retail. The stock currently has a dividend yield of 2.5%. VLO has a PE ratio of 7.1. Currently there are 9 analysts that rate Valero Energy Corporation a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Valero Energy Corporation has been 7.3 million shares per day over the past 30 days. Valero Energy has a market cap of $19.4 billion and is part of the basic materials sector and energy industry. The stock has a beta of 2.49 and a short float of 3.1% with 3.56 days to cover. Shares are up 4.9% year to date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Valero Energy Corporation as a buy. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • VALERO ENERGY CORP's earnings per share declined by 43.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VALERO ENERGY CORP increased its bottom line by earning $3.75 versus $3.67 in the prior year. This year, the market expects an improvement in earnings ($4.24 versus $3.75).
  • The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.83 is somewhat weak and could be cause for future 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 on the basis of return on equity, VALERO ENERGY CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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