7 Best Algae and Biofuel Stocks to Buy Now

3. HF Sinclair (NYSE:DINO)

Number of Hedge Funds Holders: 30

HF Sinclair (NYSE:DINO) is an independent energy company that produces and markets a wide range of specialty products and fuels, including gasoline, jet fuel, and renewable diesel. Additionally, it supplies fuel to its branded stations and licenses the Sinclair brand at 300 locations. Headquartered in Texas, the company also provides transportation and storage services in the petroleum sector.

In its 2024 second-quarter result, HF Sinclair (NYSE:DINO) reported an adjusted EBITDA of $405.8 million. Revenue jumped from $7.05 billion in the first quarter to $7.85 billion in the second quarter. The refining business posted an EBITDA of $64.7 million, down from $312 million in the first quarter of 2024. Lower gross margins in both the West and Continent regions were the primary drivers of this significant decline. However, this decline was partially offset by increased sales volume of highly refined products.

According to HF Sinclair’s CEO:”

“Our commitment to delivering safe and reliable operations is reflected in the second-quarter result, as the company achieved better utilization and lower costs per barrel in the refining business”

The company reported significant growth in the renewables segment, registering an EBITDA of $2.2 million for the second quarter of 2024, compared to a loss of $11.3 million in the first quarter. This growth was driven by improved sales volume and feedstock optimization. Volume increased to 64 million gallons in the second quarter, up from 50 million gallons in the first quarter of 2024.

The company’s total cash and cash equivalents reached $886 million, driven by $225 million in operational cash flow during the second quarter. This allowed the company to announce a second-quarter dividend of $0.50 and to repurchase $371.2 million worth of stock.

However, while the market gained about 27% over the past year, HF Sinclair did not match this performance, even after including dividends. This underperformance was primarily due to declining revenue in all major segments.

However, this may present an opportunity for shareholders, as EPS (earnings per share) grew from $0.79 to $1.16 in the second quarter. As a result, nine analysts have predicted an upside potential of 30.94% in the stock price, while 30 hedge funds have put in investments worth of $392 million, as of Q2 2024.