Last Friday, the Brent/WTI spread closed at around $13, and this is great news for refiners. Indeed, after a poor fiscal second and possibly third quarter thanks to a tightening Brent/WTI spread it looks as if the spread could finally be starting to move back toward the levels at which allowed the refiners to report record profits though most of 2012.

However, it would appear that for any investors that are late to the party, gains could be limited. In particular, some refiners such as Valero Energy (NYSE:VLO) have seen their stock prices surge as much as 21% since the lows printed at the beginning of October.

Nonetheless the rally has left out two of the sector's biggest players, HollyFrontier (NYSE:HFC) and Hess (NYSE:HES).

The favorite
HollyFrontier is one of my all-time favorite company's thanks to its strong cash generation, balance sheet, and special dividends. That said, the company's underperformance could be of concern to some investors. In particular, year to date HollyFrontier has underperformed peers Hess and Valero by 52% and 20% respectively, not good.

Still, HollyFrontier has one of the most robust balance sheets in the business, and the company has grown rapidly over the past four years. Indeed, since 2009, HollyFrontier's revenue has expanded 316%, and earnings per share have rocketed from $0.03 to $8.38 as of the end of fiscal 2012. What's more, at the end of the company's fiscal second quarter, total debt was only $990 million, with cash of $1.9 billion the company had a cash balance per share of $10, a great metric.

But something is holding HollyFrontier back, as the company's rapid growth and strategic acquisition of Frontier Oil Corporation back in 2011 should lead investors to demand a premium for the company. Personally, a cash balance and Frontier's wide network of pipelines and refineries are enough to convince me that the company is worth more than its current valuation. With $3.10 in dividends returned to shareholders during the past year, the company currently offers a trailing yield of 7%; this along with the solid balance sheet indicates that investors should snap up this cheap opportunity.

Overpriced diversification
Hess has been left out of the wider refinery sector rally, but the company does trade at a premium to many of its sector peers on a price-to-sales basis. In many respects Hess is not strictly a plain vanilla refiner,and the company deserves a premium due to its global vertically integrated operations. Vertical integration does remove a lot of the risk usually associated with refiners, especially one like HollyFrontier, which are limited to domestic production only.

Still, Hess only yields 1.2%, and the company's earnings are expected to fall 50% this year. On this basis the company does not look to be worth 14 times forward earnings, especially when integrated players such as ExxonMobil and Chevron are trading at forward earnings multiples below 12 and offer yields of around 3%.

Too far too fast
Meanwhile, it would appear that Valero Energy's 21% rise since the beginning of October is somewhat unwarranted. I'm always wary about companies that have notched rises faster than their wider sector without any significant news and Valero is no different. It would appear that the gain is linked to the widening of the Brent/WTI spread, and analysts still expect the company's revenue to fall year-on-year. Having said all of that, it would also appear that Valero is only playing catch-up, as the company still trades at lower price-to-sales and forward P/E ratios than its two closest peers, Marathon Petroleum and Philips 66

So overall, Valero could still be a good play on the industry, despite its recent gains.