Murphy USA Inc (MUSA) Pumps Up the Profits

The price of crude oil has been a very popular topic in the last several months. As crude has continued to slide, gas prices have dropped and consumers have rejoiced at the pump. But now that we’ve seen what most people believe is the worst of the dip, everyone is wondering when things will turn around for oil.

Murphy USA Inc (MUSA) Pumps Up the ProfitsYou can imagine how often I get asked about crude prices. Everyone asks me for my thoughts on diamonds in the rough or the best crude oil stocks they can get into.

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What I believe is that you can benefit from crude prices today rather than wishing for them to go back up. There are stocks out there that benefit from consumers having a few extra bucks at the pump. These are companies that own and operate the gas stations and convenience stores which are the easiest, most likely place for those extra dollars at the pump to go. I talked about the benefit to gas stations in a video late last year.

Today my Bull of the Day is Zacks Rank #1 (Strong Buy) Murphy USA Inc. (MUSA). Murphy USA operates a chain of retail stores in the US. The company’s retail stores offer motor fuel products and convenience merchandise. As of the end of 2015, the company operated 1,335 retail stores located primarily in the Southwest, Southeast and Midwest US.

A big reason for the favorable Zacks Rank is the aggressive earnings estimate revisions the company has seen over the last sixty days. Analysts have increased estimates for the current quarter and current year, pushing up our Zacks Consensus Estimate for the current year from 27 cents to 71 cents and increasing the current year number from $3.86 to $4.25.

MUSA stock shares have gone on a bullish run from late January to mid-March, moving from $50 to a high near $68. The stock seems to be retracing a big chunk of its move down from a 52-week high of $73.97 to the September lows near $47.73.

It looks like the stock is sitting right on support near $64 right now as the commodity channel index dips below the zero line to -65.50. The 50-day moving average sits well below the current stock price at $61.05, confirming a bullish medium term trend.

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