Is Valero Energy (VLO) the ultimate value investor? I read an interesting story today about Valero purchasing seven Ethanol plants from Verasun, which is in bankruptcy.
Valero paid only $477 million for the assets, which according to the article was a "fraction" of what they cost to build. Valero could have rushed in at the peak of the Ethanol bubble, and spent billions, but either through sheer brilliance or blind luck, they have acquired the infrastructure at only 30% of the replacement cost. The plants have annual production capacity of 780 million gallons.
Investors should remember there are some great companies trading at only 30% of what they sold for a year ago, and they are publicly traded, so stop being afraid and do your research carefully and make your picks.
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2 days ago
