HollyFrontier (NYSE: HFC) continues to make hay while the sun shines. The independent crude-oil refiner has been nicely playing prevailing market conditions to its advantage, thanks to the cheaper West Texas Intermediate (WTI) grade of crude oil that feeds its refineries. The fourth-quarter and full-year results of 2011 simply confirm that. But more importantly, investors may stand to benefit substantially in the near future. Let's see why.

Latest numbers
Holly's merger with Frontier last July is still reaping rewards. Total revenue for the fourth quarter of 2011 grew 125%, to $5 billion, compared to the year-ago quarter. For the full year, total revenue rose to $15.4 billion -- a solid 85% over 2010. Net income for the last quarter came in at $235.8 million, while for the entire year, the bottom line stood at $1.1 billion. But since the latest figures include the benefits of the merger, this isn't really an apples-to-apples comparison. (Figures for 2010 are those of Holly alone, prior to the merger.) Which is why it makes more sense to compare results after clubbing together both Holly and Frontier.

When you do that, the picture is still great. Taking both the entities into consideration, earnings before interests, taxes, depreciation, and amortization -- or EBITDA -- grew some 250% in 2011, to $1.8 billion. HollyFrontier has been taking advantage of the price spread between the WTI and Brent crude-oil benchmarks. On an operational front, total crude oil refined grew 42% in 2011 as a result of the merger. Still, with a capacity utilization at only 90%, there's still more room for crude inputs.

HollyFrontier also has a robust supply system to feed its refineries through a 42% stake in its crude pipeline and storage subsidiary, Holly Energy Partners (NYSE: HEP). The company also has contracts with various third party pipeline systems belonging to NuStar Energy, Chevron, and Magellan Midstream.

Still cheap?
Well, HollyFrontier trades for a P/E multiple below 8. It paid out total dividends of $1.79 per share last year, which includes special dividends of $1 per share. Management also announced a share buyback of $350 million on Jan. 3, reflecting confidence in the company's business prospects. Only last January, I mentioned that the stock looked pretty cheap, and now, it seems that management is actually considering a share buyback. With almost $1.8 billion cash sitting on the company's balance sheet, buying back undervalued shares is one of the best things management can do to push up stock prices. The buyback is most likely to be held in the second quarter of this year.

Foolish bottom line
With a capital budget of $257 million for 2012, a substantial 44% of which is kept aside to meet compliance and safety standards and another 28% of which is earmarked for reliability and growth, HollyFrontier has been doing pretty well, and it should continue to do so this year. We at The Motley Fool will help you stay up to speed on the top news and analysis on HollyFrontier. You can start by adding the company to your free Watchlist.