9 Oil Refining Stocks to Watch

Tickers in this article: ALJ CVI DK HFC MPC PSX TSO VLO WNR
NEW YORK (TheStreet) -- The oils-energy sector ended last week 7.4% overvalued with the refining and marketing industry 14.6% overvalued. There are 558 stocks in the sector and only 14 are rated buy according to ValuEngine. With 138 rated sell and another 45 rated strong sell the sector is rated underweight with 32.8% of all stocks in the sector rated sell.

The nine refiners I am profiling today performed tremendously over the last 12 months with gains between 49.4% and 164.1%, which makes it difficult to sustain these gains for another 12 months even though they have 12 month trailing price-to-earnings ratios in single-digit territory between 5.4 and 9.5. Eight of nine stocks are above their 200-day simple moving averages which represents the risk of a reversion to the mean. In my opinion these energy stocks qualify for my buy-and-trade strategy. Be aware that there are some negative divergences in the weekly chart profiles.

Reading the Table

OV/UN Valued: Stocks with a red number are undervalued by this percentage. Those with a black number are overvalued by that percentage according to ValuEngine.

VE Rating: A "1-engine" rating is a strong sell, a "2-engine" rating is a sell, a "3-engine" rating is a hold, a "4-engine" rating is a buy and a "5-engine" rating is a strong buy.

Last 12-Month Return (%): Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage.

Forecast 1-Year Return: Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.

Value Level: Price at which to enter a GTC limit order to buy on weakness. The letters mean; W-weekly, M-monthly, Q-quarterly, S-semiannual and A-annual.


Pivot: A level between a value level and risky level that should be a magnet during the time frame noted.

Risky Level: Price at which to enter a GTC limit order to sell on strength.