Time to cash in some options

[sammyg2]

That's what better than predicted earnings, a new stock-buy-back program, and re-instatement of the dividend program looks like. Up almost 15% on the day.


Just placed the order to exersize most of the matured options I've been sitting on.
The tax man is really gonna love me, guess they won't have to worry about that budget deficit anymore

[biosurfer1]

nice...I bet there are a few people who feel the exact opposite with options in Knight Capital today:O

[sammyg2]

New info

..Tesoro to buy BP refinery in $2.5 billion deal

(Reuters) - Tesoro Corp (TSO) said it would buy BP Plc's (LSE:BP.) refinery in Carson, California, and related assets for about $2.5 billion.

Independent refiner Tesoro on Monday said it would pay $1.18 billion for BP's refining and marketing business in Southern California, plus the value of the refinery's inventory at the time of closing. At current prices, the inventory is valued at $1.3 billion.

The 266,000-barrel-per-day refinery is located south of Los Angeles. It is adjacent to Tesoro's 97,000-barrel-per-day Wilmington refinery.

Tesoro said that after an additional capital investment of about $225 million, the deal should generate annual cost savings of $250 million.

The deal includes a retail marketing network of about 800 dealer-operated gas stations, ownership of BP's Arco brand, 51 percent-ownership in a company-operated 400 megawatt cogeneration facility, and other assets.

Tesoro is also buying storage and distribution assets from BP, including more than 100 miles of pipeline, three marine terminals, four land storage terminals and four product marketing terminals. It plans to sell these assets to its master limited partnership, Tesoro Logistics LP (TLLP), for around $1 billion within a year of closing.

It expects the deal to close before mid-2013. Tesoro said it plans to pay for the purchase with debt and the cash generated from the sale of assets to Tesoro Logistics.

BP said in late July that it was in advanced talks on the sale of the Carson plant, as well as its Texas City, Texas, refinery.

BP announced in February 2011 that it would sell the refineries by the end of 2012 as it reorients its U.S. refining operations to take advantage of Canadian crude supplies.

BP's North American products division, which oversees its U.S. refineries, finished a three-year probation term in March that stemmed from a 2005 explosion that killed 15 people and injured many more at a refinery in Texas City, Texas.

BP also said on Monday that it will sell two processing plants and an associated gathering system in the Texas panhandle to Eagle Rock Energy Partners (EROC.O) for $227.5 million.

(This story corrects in 10th paragraph to show probation ended in March)

(Reporting by Michael Erman and Matt Daily; Editing by Lisa Von Ahn and John Wallace)

..

[sammyg2]

Talk about pisspoor timing, I missed out on over $50k I could have gotten if I would have waited:

Tesoro Strikes Gold in California
By ANDREW BARY |

Wall Street has started to appreciate the gritty appeal of oil refiner Tesoro. With a transformative new acquisition, there's a lot more to love.

Tesoro, the West Coast oil refiner, may have pulled off the acquisition of the year when it reached a deal last month to purchase a large California refinery from BP for $1.175 billion.

By Tesoro's calculations, it paid virtually nothing for the refinery—in Carson, south of Los Angeles—when considering other assets included in the deal, such as pipelines, other energy infrastructure, gas stations, and the ARCO brand. The BP (ticker: BP) refinery could be worth $1.5 billion or more, which is significant relative to Tesoro's (TSO) market value of $5.6 billion.

Wall Street liked the transaction, and it has warmed to the entire group of domestic oil refiners this year. The five major independents, Marathon Petroleum (MPC), Phillips 66 (PSX), HollyFrontier (HFC), Valero Energy (VLO), and Tesoro, are up an average of 50% in 2012, making refiners one of the market's top-performing groups.

Tesoro is among the best of the bunch, with a 69% gain to $40 (over $41 today). A further advance could be in store because of the company's enhanced West Coast muscle. Tesoro CEO Gregory Goff called the deal "transformational" and "immediately and highly accretive to earnings." Investors pushed Tesoro stock up about 10% afterward. The shares still look appealing, trading for 6.8 times projected 2012 profit of $5.84 a share.

The bargain purchase of a BP refinery enhances Tesoro's existing strength on the West Coast.
.After initially trumpeting the benefits of the BP deal, Tesoro seems to be taking a lower profile, perhaps because it doesn't want to alienate antitrust and other regulators that must approve it. Tesoro declined to speak to Barron's.

"It's our favorite stock in the group," says Paul Cheng, the refining analyst at Barclays. He argues that the company's earnings power was underappreciated even before the BP transaction in view of steps the company had taken to boost output and improve operations. Cheng says Tesoro's trough annual earnings are likely to be $5 a share. He has an Overweight and an admittedly high price target of $84. A more realistic target would be $60, or about 10 times estimated 2012 profit.

Refiners are in vogue because of ample earnings, higher dividends, and improved perceptions about the industry's long-term prospects. Many are benefiting because they have refineries in the middle of the country, where crude oil is cheap relative to world prices because of growing supply and insufficient pipeline capacity to bring that oil to the Gulf Coast. This is leading to high refining margins based on wide "crack spreads," which refers to the profits from converting crude into gasoline and other petroleum products.

THE CURRENT POPULARITY CONTRASTS with gloom a few years ago as investors worried about the viability of refineries amid weak gasoline demand, slim margins, and the threat of cheap imported oil products.

With capital spending down, refiners, including HollyFrontier and Valero, are boosting dividends, and more big increases are possible because of considerable free cash flow. Cheng says the major independents are easily capable of paying 4% dividends.

Tesoro initiated a payout of 12 cents a share in August, for a yield of 1.2%, and could pay a multiple of that, given its earnings power. It has an excellent balance sheet with just $400 million of net debt. The refiner also owns 50% of a master limited partnership, Tesoro Logistics (TLLP); the share is worth more than $600 million.

Tesoro was able to negotiate attractive terms on the refinery purchase because BP was a motivated seller, restructuring its global operations to focus on energy production and raising cash to cope with tens of billions of dollars in liabilities stemming from its Gulf of Mexico oil spill in 2010. Tesoro was a uniquely positioned buyer because it owned a refinery next to the BP facility and already had extensive pipeline, storage, and logistics assets in California.

The BP pipeline and other infrastructure assets are likely to be sold for $1 billion to the Tesoro Logistics partnership. The company pegs the value of the BP retail assets at $125 million, meaning it effectively is paying only $50 million (based on the $1.175 billion price minus the $1 billion and the $125 million) for the 266,000-barrels-a-day Carson refinery. Tesoro now owns seven refineries with a combined capacity of 675,000 barrels a day. The BP refinery generates about $500 million of annual cash flow, which would put its worth at $1.5 billion using currently low industry valuations.

A bullish Tesoro released unusually detailed forecasts after the deal. It projected that it could boost profits by 24% in both 2013 and 2014. That would result in earnings of close to $6 a share in both years, based on then-prevailing consensus estimates.

Many refiners have shunned California because of tight regulations on refinery emissions and strict pollution controls on gas. That makes the Golden State a virtual island because gas refined elsewhere often doesn't meet its standards. The weak economy also has soured refiners on the market, but Barclays' Cheng says conditions are improving.

The Bottom Line
Although the stock has surged 69% this year, Tesoro is still cheap and could rise more than 40% in the next year. The company owns seven refineries in the U.S.

.Tesoro had an excellent second quarter, when it earned $2.75 a share, and the current quarter also looks strong, in part because of a fire last month at a big Chevron refinery near San Francisco that cut output and lifted California refining margins. Profit estimates for the current quarter have risen, with Morgan Stanley energy analyst Evan Calio last week lifting his third-quarter projection to $2.69 a share from $2.22. The consensus is below $2. Tesoro has consistently bested its West Coast peers in profit margins.

[BlueSkyJaunte]

Shoulda-woulda-coulda.....take the money and run. If it makes you feel better I have options at around $120, and today's price is in the mid-$20's.

[MRM]

Sammy, the original Baron Rothschild explained the secret to his investment success by saying he never bought at the lowest point, and never sold at the highest point. his point was that people go broke waiting for the peak or valley, so you just buy and sell based on your objective evaluation of the stock. If you get what you wanted for it, you got a good deal.

I wouldn't sweat missing out on the run up. Another famous Texas investor explained his upbringing in abject poverty after being born into a wealthy family because his father had made so much money on cotton futures that he put the family's entire fortune at risk in the market, certain that he knew when to time the absolute peak and unwilling to leave a cent on the table:

"My Daddy waited for cotton to hit 20 cents a pound before he sold. Unfortunately, the market broke at 19 and the panic set in." Cotten went to a nickle a pound and our family was ruined". Lyndon Baines Johnson

Apparently his father would have broken even as low at 12 cents or so. But the market was being supported only by speculators and once the bubble burst, cotton became worthless and LBJ's dad lost the family farm.

You got a nice spike and didn't bet the farm on it, so sleep well.

[Seahawk]

I bought some stock last year after a few threads here, when I was able to figure out where you worked.

Not a lot, just enough to make me smile. I'll hold.

Thanks.

[sammyg2]

Originally Posted by MRM

Sammy, the original Baron Rothschild explained the secret to his investment success by saying he never bought at the lowest point, and never sold at the highest point. his point was that people go broke waiting for the peak or valley, so you just buy and sell based on your objective evaluation of the stock. If you get what you wanted for it, you got a good deal.

I wouldn't sweat missing out on the run up. Another famous Texas investor explained his upbringing in abject poverty after being born into a wealthy family because his father had made so much money on cotton futures that he put the family's entire fortune at risk in the market, certain that he knew when to time the absolute peak and unwilling to leave a cent on the table:

"My Daddy waited for cotton to hit 20 cents a pound before he sold. Unfortunately, the market broke at 19 and the panic set in." Cotten went to a nickle a pound and our family was ruined". Lyndon Baines Johnson

Apparently his father would have broken even as low at 12 cents or so. But the market was being supported only by speculators and once the bubble burst, cotton became worthless and LBJ's dad lost the family farm.

You got a nice spike and didn't bet the farm on it, so sleep well.

Point well-made.
I also have some options exercisable at $42. I figured they were worthless and that the stock would never get that high before the options expire in 2014 but I may be able get a few bux for them yet.
So, do I cash them in at $43, or wait for $50? Maybe $60? Gotta get that crystal ball out of the shop.

[red-beard]

I hope your company has a better safety record than BP. Not that this is exactly hard....

You should have moved to Texas before exercising your options...

[RWebb]

Tesoro has a pretty poor safety record what with the refineries blowing up and killing workers, and has been successfully sued by several school districts for polluting children's drinking water.

[KFC911]

Originally Posted by Seahawk

I bought some stock last year after a few threads here, when I was able to figure out where you worked.

Not a lot, just enough to make me smile. I'll hold.

Thanks.

I peered into Sammy's crystal ball several years ago and bought TSO at $39...rode that sucker all the way down to 13 . Nice goin' this time Sammy...can ya spare me me a dime mister?

[sammyg2]

Originally Posted by RWebb

Tesoro has a pretty poor safety record what with the refineries blowing up and killing workers, and has been successfully sued by several school districts for polluting children's drinking water.

As usual, webb shows his ignorance about subject he knows little about or simply exaggerates to the point of intentional deception.

This is a dangerous business and anyone who says it isn't is lying. But Tesoro is an industry leader in safety.
There was a very unfortunate accident that occured 2 years ago where 7 of our brother workers lost their lives due to a heat exchanger rupturing from hydrogen embrittlement. We still grieve over that loss.
But to use that to sum up a safety record for 7 refineries over decades of operation is misleading at best, sleazy at worst.
Tesoro recieves safety awards every year from organizations like the NPRA (national petroleum refiners association) for being an industry leader in safety.

In an industry that is inherently fraught with danger, one of the most dangerous manufacturing industries there is, Tesoro has a TRIR (total recordable injury rate) of 0.47
Go ahead and ask someone in the safety business just how good that is.
Maybe Hugh will chime in, he knows just how good that is.

Companies like Apple or Microsoft dream of a safety record that good, and their biggest worry is a paper cut or someone tripping on a rug. Not containing a 2000 psi mixture of 900 degree oil and hydrogen.

At the Los Angeles refinery in 2011 they had a TRIR of 0.00
ZERO OSHA recordable injustries for the entire calendar year with approximately 850 full time employees.
How many billion dollar industrial manufacturing facilities can say that?
I bet you could count them on one hand.

[sammyg2]

Originally Posted by KC911

I peered into Sammy's crystal ball several years ago and bought TSO at $39...rode that sucker all the way down to 13 . Nice goin' this time Sammy...can ya spare me me a dime mister?

That's why the ball is in the shop, I threw it into the wall after that drop in 2008.

You rode it all the way down to 13? Ouch, obviously no one can say you're a quitter
Did you hold onto it to get some of the rebound?

[BlueSkyJaunte]

Originally Posted by sammyg2

Companies like Apple or Microsoft dream of a safety record that good, and their biggest worry is a paper cut or someone tripping on a rug.

You wouldn't believe how dangerous those Aeron chairs are.

[RWebb]

Careful sammy - are you saying that your employer has the best safety record in its industry segment? That can be checked you know...

and FWIW, all the refiners get awards from the organization they 'own' (pay dues into)


oh, and in the spirit of full disclosure... just the other day the arm loosened on my Aeron chair and I was discomfited for several seconds!

[KFC911]

Originally Posted by sammyg2

That's why the ball is in the shop, I threw it into the wall after that drop in 2008.

You rode it all the way down to 13? Ouch, obviously no one can say you're a quitter
Did you hold onto it to get some of the rebound?

No, I finally quit...a late quitter . TSO was just one of my energy sector holdings before the crash, and I suffered just like everyone else, but it was the "dog" for me. I've still got KMP (but sold NS 'bout a year ago - VLP spinnoff that I asked you about years ago), and got out of BP after the spill (still way up overall). All in all, I'm well over my pre-crash ('07 or so) totals (not including additional funding), so I'm not complaining...ya win some, ya lose some

[Hugh R]

Here are the highest incidence rates by industry. http://www.bls.gov/iif/oshwc/osh/os/ostb2801.pdf

0.47 beats law office and banks, btw. It also beats my industry.

[gprsh924]

.47 is pretty pretty pretty good.

Why are nursing facilities so high?

[Hugh R]

Mainly back injuries from lifting patients, I would suspect.

[RWebb]

that table is only for nonfatal injuries and only for workers - it does not cover the dead workers at refineries nor the poisoned school children