Oil Refiner PBF Energy is up about 100 percent in past four weeks and has the potential to go up 500 percent from here in 5 years

Market declines are great opportunities to buy stocks in companies you like. Corrections – Wall Street’s definition of going down a lot – push outstanding companies to bargain prices.

Peter Lynch
  • This is an update to my last post that I published on Monday April 27 . You may see the post here.
  • The PBF stock ( ticker PBF ) has gone up about 50 % since the time I published the last post three days back.
  • The stock has nearly doubled in past four weeks.
  • The stock hit all time high of 53.9 in year 2018. From the all time high it has last about 80 % value due mainly Covid 19 triggered oil demand decrease.
  • If the stock goes up 500 % from its current price of 11.4 that means it will climb around 57 , not an unrealistic price.
  • The company earned $ 2.63 per share last year , 2019. Analysts expect that the company will be able to increase its earnings at a compund annual rate of at least 14 percent in the next five years. That will take its per share earning to approximately 5.2 in five years.
  • Assigning the company a reasonable price earning ratio of 13 that would mean the company will have a fair price of 67.6 ( 5.2X 13) in five years or so. From current price of 11.47 it would be an increase of 560 %.
  • To arrive these results we have made predictions of future earnings. A lot of things can go wrong. Future is always uncertain , but we have no choice but to make assumptions. The company has just recently added a refinery and hence increased its capacity (throughput ) significantly . This will help the company to increase its earnings even the more. Even if the earning estimates above are not met and actual earnings come say about $ 3 per share , the price can go up to 30 assuming a modest P/E ratio of 10. That means stock would more than double in 5 years , this will be far less than my expectations but still a very attractive appreciation.
  • Please note that company’s executives and senior officers own 5089253 shares of the company thats 4 % of the total shares. This means the company directors and officers have a higher stake of their own in the company growth.The beneficial owner Carso S.A. De C.V. Inversora owns 23361778 shares of the company and has bought hundreds of thousands of shares in each of the last three months. This gives us further confidence. Carso S.A. De C.V. Inversora now owns 20 percent of the company.
  • To see the PBF stock chart please click here.

Disclaimer : As always investors are adviced to do their own research before taking any buy sell decisions about this or any other stock. Future earnings are always estimates which can go grossly wrong . The stocks in general follow the earnings rise in longer terms. One should keep these things in consideration when making investment decisions .

Author: Nadeem Aslam

I am an Engineer by Training. Have worked for different airlines as a flight crew ( Flight Engineer ). I have travelled a lot. I experienced living in different countries , Japan, Pakistan, U.K. and Canada. About me I was based in Japan in 1990's many of my colleagues were American and almost all of them were investing in American stocks. In fact they founded an investment club. I joined the club , we shared the knowledge and the books , magazines and other material. I have been investing since then. What is the Stocks , Finance and Beond ? The blog is to share the knowledge and my investment experience. Many of my friends and relatives ask me how to invest in stocks , about mutual funds etc.etc. I answer their questions and then one day I decided to share with every one who may be interested. I chose the name stocks , finance and beyond to include wide ranging topics such as saving , investing , personnel finance philanthropy. So that's how I came up with StocksFinanceandBeyond.com

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