CVR Refining, LP (CVRR) A Stock to Buy on Insider Confidence?

The CVR Refining, LP (NYSE:CVRR) bears won the day, but the reality is that the -0.25 points or -1.23 percent decline gave very little definitive technical indication of where the stock could be headed next. On 13 September, the shares traded at $20.1 with a light trade volume of 205.806 thousand shares. The firm is left with a market cap of $3.06 billion and now has 152.36 million shares outstanding. CVR Refining, LP (CVRR) stock has gained 3.88 percent of market value in 21 trading days.

CVRR stock has a trailing 3-year beta of 1.53, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $2.07 a share in the trailing twelve months. The stock’s value has surged 21.45 percent year to date (YTD) against a rise of 119.67 percent in 12 month’s time. The company’s shares still trade -22.69 percent away from its 1-year high of $26.00 and 129.71 percent up from 52-week low of $8.75. The average consensus rating on the company is 2.8, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

CVR Refining, LP (CVRR) will probably climb 15.27 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $27-month high price target. This represents a whopping 34.33 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $23, which represents a return potential of 14.43 percent when compared to the closing price of the stock of $20.1 on Thursday, September 13. The lowest price target for the stock is $20 — slightly more than -0.5 percent from CVRR’s current share price.

History has shown that shares in CVR Refining, LP have gone up on 12 different earnings reaction days and are predicted to add 0.05 percent when the company reports upcoming earnings. Investors will get their next glimpse of CVRR’s Q3 earnings on November 01. Analysts are forecasting revenue to climb 26 percent to $1.75B in the fiscal third quarter, while earnings are seen soaring by nearly 53.19 percent to $0.72 per share. It earned $0.73 per share, worse than the $0.82, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $1.82B, better than the $1.72B analysts expected. Earnings are estimated to increase by 480.4 percent this year, 29.57 percent next year and continue to increase by 0 percent annually for the next 5 years.

Let’s take a look at some insider activity at CVR Refining, LP (NYSE:CVRR) and see the pattern. The earliest insider trade took place on 08/02/2016. Icahn Carl C parted with a total of 250 thousand shares of company at average share price of $5.7. The total for the sales was set at $1.43 million. After this transaction, the Director, 10% Owner account balance stood at 103 million shares. The stock grew 257.02 percent since that insider sale. On 02/24/2015, Haugen Robert W, EVP, Refining Operations, sold 4 thousand shares at a price per share of $18.59. This removed 74.36 thousand shares from the insider’s fortune and the stock saw a 9.47 percent rally in value since the news became public. This transaction left 0 thousand shares in the EVP, Refining Operations account.

On 01/20/2015, Director, 10% Owner Icahn Carl C performed a sale transaction worth $148.73 thousand. This sale at $16.46 each has eliminated 9.04 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded 23.63 percent increase since the transaction was reported. The insider now is left with 12 thousand shares remaining in the account. Cozza Keith, who performs the Director job, sold 10 thousand shares for $263.4 thousand. The disposal occurred on 09/13/2013 was priced at $26.34 per share. The share price plunged -22.74 percent since the reporting date. Cozza Keith now left with a stake of 0 thousand CVRR stock worth $0 thousand after the insider selling.

The stock is currently hovering around the first support level of $19.83. Below this, the next support is placed in the zone of $19.57. Till the time, the CVRR stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 41.72 on daily chart, which may remain a cause for concern. If the price breaks below $19.57 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $20.38 mark may result into a pull-back move towards $20.67 level.

Shares of CVR Refining, LP (CVRR) are trading at a P/E ratio of 9.7 times earnings reported for the past 12 months. The industry CVRR operates in has an average P/E of 20.36. Its P/E ratio went as low as 6.51X and as high as 100.33 over the 5-year span.Further, it is sporting a 0.5 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.08. 7.2 percent is the gross profit margin for CVR Refining, LP and operating margin sits at 5.8 percent. Along with this, the net profit margin is 4.9 percent.