Front and center of processing that carbon is the oil refiner. Traditionally refining has been a tough business. The capital and maintenance expenses eat away at margins. Profits are razor-thin and as such, investors have typically shied away from owning the refiners. Oil price volatility doesn’t help either, but now might be a good time to own the oil refiners with prices seemingly stable at the $100 per barrel mark.
One of the cheapest refiners to own right now is Tesoro (TSO). The company is expected to grow profits by 70% next year. At current prices, shares trade for just 14 times 2013 estimated earnings. I think you can safely profit on this one for a year or two – long before the Gore oil bubble deflates.