Alon USA Energy, Inc. (NYSE:ALJ) Stock Rally On News of Ethanol Ceiling Relaxation


Dallas, Texas 10/28/2013 (Financialstrend) – Alon USA Energy, Inc. (NYSE:ALJ) is an oil and gas refining and marketing company which has a market cap of $736 million. Its shares along with a host of other oil refineries has seen a smart rally since October 10 when news items started to circulate with buoyant news that Environmental Protection Agency might relax the quantity of bio fuel which has to be  mandatorily mixed with fossil fuel as of today. The speculation is rife that these relaxed requirements of bio fuel will probably be brought into effect by EPA fro next calendar year. People who are in the know of the current thinking of EPA have been quoted as saying that the reason behind this potential relaxation of ethanol mix into fossil fuel is because the agency thinks further “ethanol” injection into U.S. fuel economy might prove counterproductive.  They have indicated ambiguous reports of artificial demand for corn by bio fuel producers placing  huge pressure on the cattle and agriculture producers as an additional reason for taking a breather on upping the ethanol mix into auto fuel.

In more good news for long term investors into the stock, ALJ stock posted a 6.7% rally on positive comments which J.P. Morgan analysts had made in the week of October 10. The report had highlighted that oil refining companies are better placed than the end to end petro giants who are facing headwinds in their downstream operations.

Alon USA has managed to post annual sales of $7.6 billion and managed to record net income of $124 million in the same period. It has paid out dividend of $0.24 per share over the past 12 months which translates to a dividend yield of 2.04%. Investors in the stock would be hoping to see a equal if not more dividend payout in the ensuing 3Q.