Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Alon USA Energy Inc. Shares Popped

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Alon USA Energy (NYSE: ALJ  ) , a refiner and marketer of petroleum products in the south central, southwestern, and western U.S., popped as much as 11% after the company received an upgrade from Credit Suisse before the opening bell.

So what: Credit Suisse upgraded Alon USA Energy from neutral to outperform and boosted its price target from $16 to $19, implying 37% upside based on yesterday's closing price. This actually marks the second upgrade by Credit Suisse on Alon just since November. The upgrade was based on improved West Coast logistics in Bakersfield, Calif., where Alon has an opportunity to improve its ability to increase crude-by-rail offtake.

Now what: As always, I would remind investors that analyst actions are often short-term share-price drivers that rarely have any effect on our long-term investment thesis. The refining sector has been smacked by weakened crack spreads in the fourth quarter. However, those spreads have been improving over the past couple of weeks and could lend to market-topping results in the first quarter. At just 11 times forward earnings, Alon USA Energy isn't particularly expensive, but investors should understand that the refining business tends to be highly cyclical, and factor that into their investment outlook.

Alon USA Energy shares may be roaring today, but there's a good chance it'll have a hard time keeping up with this top stock in 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2871230, ~/Articles/ArticleHandler.aspx, 8/31/2015 8:14:29 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated Moments ago Sponsored by:
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASD 4,776.51 -51.82 -1.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/31/2015 4:04 PM
ALJ $18.54 Up +0.09 +0.49%
Alon USA Energy, I… CAPS Rating: ***