This best-in-class refiner has experienced major disruption to its operations as demand for gasoline, diesel, and jet fuel have all recently plummeted. However, investors who look past this temporary decline can find great value long term. HollyFrontier (HFC) is this week’s Long Idea.
HollyFrontier’s “Dip” in Profits
From 2016 to 2019, HollyFrontier grew revenue by 18% compounded annually and core earnings by 44% compounded annually, per Figure 1. The firm increased its core earnings margin from 2.8% to 5.1% over the same time.
As expected, trailing-twelve-month core earnings have declined significantly as the