Combining lists in Nasdaq stock exchange, i New York Stock Exchange (NYSE), and over-the-counter (OTC) markets, more than 12,000 stocks are traded in the US That number is large enough to ensure that many promising names are overlooked or underappreciated.
Undoubtedly, that is the refiner’s plight Delek US Holdings share price (NYSE: DK). At a time when the energy sector and small stocks are on the rise, Delek, with a market capitalization of less than $3 billion, should attract more attention.
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The reality is that the stock is leading the way with an unknown unknown, which is really strange given its 64% year-to-date gain.
However, it is completely ignored. At the top up 13% since May 26Delek is joined by 13 sell-side analysts, making sure Wall Street knows this stock. That could be a sign that Delek’s lackluster status can change in a heartbeat, indicating that smart investors may want to check the name here and now.
Delek is unique among refiners
Experienced investors with oil stocks know that this is an industry where scale matters. That feeling carries over to the bottom line, where companies like Marathon Petroleum again Valero processing millions of barrels per day, over 302,000 Delek handles. Put another way, many investors tend to “go ahead” with picking stocks.
However, there are advantages to Delek’s method, which some experts describe as “surgery.” The company can make small changes that won’t move the needle on Marathon or Valero, but will be meaningful for a company that hasn’t yet exited the small-cap space. Launched in 2022, Delek’s business development plan “cuts the fat” by cutting overhead and reducing waste. It doesn’t sound “sexy,” but that effort could be a contributing factor to the stock’s more than doubling over the past three years.
Delek’s surgical approach is paying off in other ways. Its first quarter results confirm that. Revenue of $2.52 billion was in line with what it posted a year ago, but Delek suggested a five-fold increase in earnings before interest, taxes, depreciation, and amortization (EBITDA). Translation: Delek’s ingenious working methods have encouraged very high wages without requiring correspondingly high capital gains.
