Laugh all the way to the pump with Delek US Holdings Inc (DK)

Is it just me or has it become almost unbearable to stop at the gas station lately? With record gas prices draining away the extra cash of the average American, it’s time to take a stand and recover some of that money that’s been lost at the pump.

I’m not suggesting that you pull up to your local 7-Eleven, fill up the tank of your Hummer H2 and drive off (while cackling like a maniac) - I’m implying that you invest in Petroleum.

Current prices may slow gasoline demand growth in the United States but are unlikely to dent demand significantly in coming months, the International Energy Agency said on Friday, December 14th.

"It is perhaps premature to conclude that U.S. gasoline demand is inevitably poised to contract significantly in the months ahead," the IEA, energy adviser to industrialized countries, said in its monthly report.

"Most likely, its pace of growth will continue to slow down slightly," it said. "More permanent behavioral changes will take longer and perhaps require much higher retail prices."

America, if you thought gas prices were going to come down anytime soon, don’t count on it. What you can count on is shelling out $50-$150 a tank for gas, depending on the fuel efficiency of your car, and where you live.

24 month Gas Chart

But thanks to the Stockmasters, you have options. Take a look at Delek US Holdings Inc (DK) Delek US Holdings, Inc., through its subsidiaries, engages in the refining and marketing of petroleum products in the United States. It operates through three segments: Refining, Marketing, and Retail. The Refining segment operates a refinery in Tyler, Texas, with a design crude distillation capacity of 60,000 barrels per day, along with an associated crude oil pipeline and light products loading facilities.

With a P/E of just 8.59. DK is a steal when compared to rivals Noble Energy (NBL) P/E 16.26, Murphy Oil Company (MUR) P/E 22.02 or Ultra Petroleum (UPL) P/E of 50.61.

The analyst upgrades have just started pouring in, starting with Citigroup on December 17th. This is just the beginning – DK is trading just 5 points above it’s 52 week low of 14.82, and well below its high of $30.77. Stay tuned, the Masters think we’ll see DK trading in the $25 range within the next 6 months.

On a side note - I noticed while writing this article that high gas prices match the states that are Democratic. What gives?

Article written by Eric Cheshier

Co-Founder of theStockMasters.com

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