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Retail Petroleum Find Ways to Generate Returns

David Becker
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Retail petroleum company’s have found ways to generate income beyond just selling gasoline. Murphy USA Inc (NYSE:MUR) operates a chain of retail stations in the United States. Its retail stations offer motor fuel products and convenience merchandise.

The stock continues to rebound after declining with the broader markets in January, and softer than expected earnings. Margins aren’t great in the gas station business, but Murphy makes up for it inside the convenience stores. In the company’s recently ended quarter, non-tobacco store products continued their upward trajectory while management made some strategic choices, such as selling an ethanol plant, aimed at monetizing non-core assets.

The 52-week range of MUSA is $ 36.12 – $46.91, and the stock hit a 52-week high in November 2013. Earnings per share declined by 49% quarter over quarter. The three year growth rate of earnings was down 13%. Sales were flat quarter over quarter and the three-year growth rate of sales was up 4%.

There have been recent insider purchases of the stock which should give investors’ confidence. The Chief Executive Officer Clyde Andrews purchased 5K shares on February 24, 2014 for total proceeds of nearly 200K. There were no insider sales of the company stock in 2014.

The stock price is testing resistance levels near the 50-day moving average at $40.60. A close above this level would likely lead to a test of $44. Support is seen near $38.50. Momentum is positive with the MACD (moving average convergence divergence) index printing in positive territory with an upward sloping trajectory. The RSI (relative strength index) is printing near 52, which is in the middle of the neutral range.

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