iBooyah.com: Valero (VLO) downgraded; easy money
Valero (VLO) has been taking a hit lately as the price of oil has been dropping. Yesterday, Citigroup (CIT) downgraded the stock to “hold” citing concerns over margins as the summer driving season comes to a close. The stock shed almost 5% and closed slightly below $53 per share. The new price target by Citigroup is now $65.
In my view, the concern is overblown as demand for gasoline remains high. Here is an example where the stock is priced incorrectly. Although the price of oil has been dropping, it will not last. All it takes is something to happen in the Middle East and oil will be around $75/barrel again. This recent drop in VLO share price represents a buying opportunity. I can easily see 5 point gain from here in the next few weeks.
Good Luck!
