Maybe best buys in market right now.

Oil refiners might be your best buy in the stock market right now. The PE's are ridiculously low and the upside could be substantial.  Add in that many of these stocks pay a nice dividend as well.  

The list is long here, HFC, VLO, PSX, and MPC are our favorites due to their market caps, size of business, and concentration in the refinery side of the oil business.  

All these stocks mentioned have PE's below 10 and dividends above 2%.  Note that HFC has a special dividend that has become a normal dividend and pays north of 6% right now.  HFC is the smallest of the group market cap wise however so the risk might be a bit more.  Of course with a PE of around 5 it is dirt cheap. 

The reason these stocks are low priced is that the refinery business has always been boom and bust depending on the cost of oil, the cost of refining, and regulatory pressures. These operations can not just turn on a dime and stop levels of refining when prices go down due to people driving less so what is in the pipeline at a higher price can get sold at a loss. Refineries are a not in my backyard business as well so no refineries have been in added in the US in about half a century.  Of course environmental extremists hate oil and have blocked any permits that have been sought. This has led to a concentration of bigger refineries owned by fewer concerns.  There is also the Ethanol mandate that is a good part of the recent and likely future rise in US oil prices.  The EPA yesterday decided not to allow some give in the mandate so gas at the pump is headed up due to the oversupply of Ethanol.  Lastly there is the constant overhang of Obama deciding to wake up one morning and slap a new onerous EPA standard on refineries. Yes, the risk the significant here. 

However the opportunity might be better.   The refinery group has lower cost oil via the new North Dakota and now even lower cost Canadian crude getting to the refinery cluster on the US Gulf Coast. The North Dakota crude was getting there all along by rail and mostly pipelines.  Now the landlocked Canadian crude is getting there by pipelines that have changed direction and lots more rail cars.  The Keystone XL pipeline blocked by Obama due to environmental extremist concerns has been sidestepped by those rail and pipeline measures and now the construction of the Keystone XL might be mute. Note Warren Buffett owns lots of these rail cars and making a killing there, plus he owns a big slice of PSX so he is making money on that end as well.  As long as Warren and Barack are in bed together there will be money to be made here by them and also you.  Lower priced crude being refined is now going outbound to other countries at the higher world price.  Yes, it hurts US consumers, but such is the cost of political inaction.  Add in that these refineries are now running on low low cost of US natural gas and the bottom lines from that energy source are making for higher profits as well. 

So the risk is there, but the low PE's note that the risk is already priced in to these stocks.  The opportunity is there as well and unless something changed significantly the value of buying these stocks makes for a good decision.  We currently own HFC and will likely add one more of these stocks shortly.  We suggest you consider one of them as well.