Published On: Wed, Jan 23rd, 2013


Incorporated in 1968 in Delaware, TSO is an oil refining and marketing company operating seven refineries in western USA. The company refines crude oil and other feedstocks into transportation fuels such as gasoline / blendstocks, diesel, jet fuel, HFO, LPG, asphalt & petroleum coke. Total refining capacity of the 7 refineries is around 665,000 barrels per day. TSO has an operating (bulk) and a retail segment for selling & distribution of products. The retail segment sells transportation fuels plus convenience products in eighteen US States through a network comprising of 1,175 retail stations primarily under the USA GasolineTM,  Shell and Tesoro brand name. During 2011, TSO entered into agreements to expand its network of retail stations by opening 290 till 2014.

The company currently has a market capitalization of $5.89B. Total sales of gasoline (through company operated stores plus jobbers / dealers) in 2011 was 1.526B gallons (1.329B gallons in 2009). Consolidated revenue was $30.30B (16.87B in 2009) which resulted in a net income in 2011 of $ 546 M (net loss of $140M in 2009). In the TTM, TSO has reported sales of $ 31.97B with net income of $592M (NPM of 1.85%). Return on equity & return on assets were 14.01% and 6.89% respectively. The diluted EPS is $4.19 which translates to a P/E of around 10.07 (industry P/E of 14.67). The PEG (five year estimate) comes to 0.48. Price to Book ratio is 1.34. Debt-Equity ratio for the company is 33.72 (debt of $1.59B). The TTM dividend yield is 0.6% with 5 year average being 1.4%. Institutional investors are holding a substantial stake (90%) in the company. Next earnings are due on 7th February 2013.

As evident from chart 13.1 , the TSO stock is trading well above its 50 and 200DMA with golden cross having been achieved several months back in August 2012. The 52W high / Low for the stock is around $20.77 & $45.44 respectively with stock having risen 78% during the period. The beta for the stock is 1.96. (Source: Yahoo Finance)

Fig 13.1

Fig 13.1

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.