Stock on Focus: Tesoro Corporation (TSO)

Company Profile:

Tesoro Corporation, through its subsidiaries, engages in petroleum refining and marketing activities in the United States. It operates in three segments: Refining, Tesoro Logistics LP (TLLP), and Retail. The Refining segment refines crude oil and other feed stocks into transportation fuels, such as gasoline, gasoline blend stocks, jet fuel, and diesel fuel, as well as other products, including heavy fuel oils, liquefied petroleum gas, petroleum coke, calcined coke, and asphalt. The TLLP segment owns and operates a network of approximately 3,500 miles of crude oil, refined products, and natural gas pipelines; 28 crude oil and refined products truck and marine terminals; and approximately 9 million barrels of storage capacity. The Retail segment sells gasoline and diesel fuel through multi-site operator retail stations, and third-party branded dealers and distributors in the western United States. As of December 31, 2014, this segment operated a network of 2,267 retail stations under the ARCO, Shell, Exxon, Mobil, USA Gasoline, and Tesoro brands. The company was formerly known as Tesoro Petroleum Corporation and changed its name to Tesoro Corporation in November, 2004. Tesoro Corporation was founded in 1968 and is headquartered in San Antonio, Texas.

Recent News:

Tesoro Corporation (TSO) has agreed to acquire Great Northern Midstream LLC, a crude oil logistics provider which owns and operates high-quality, recently constructed crude oil pipeline, gathering system, transportation, storage and rail loading facilities in the Williston Basin of North Dakota.

Its board of directors declared a dividend of $0.50 per share on common stock. The dividend is payable on December 15, 2015, to shareholders of record as of the close of business November 30, 2015.

Tesoro Corporation ( TSO ) reported third quarter net earnings of $759 million, or $6.13 per diluted share compared to net earnings of $396 million, or $3.05 per diluted share for the third quarter of 2014.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

TSO’s strengths can be seen in its better growth, better profitability and strong efficiency. Its revenue has increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in Stochastic Oscillator. RSI is increasing to 47.33. The current P/E ratio indicates it is undervalued compared to the average P/E ratio of the industry. We rate Tesoro Corporation (TSO) a STRONG BUY.