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Florida-based GeoSphere Capital Management initiated a stake of 150,000 shares in Delek during the third quarter.
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The resulting position was worth about $4.8 million at the end of the quarter and represented 3.7% of 13F reportable assets under management.
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The holding is not one of GeoSphere’s top five holdings.
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Florida-based GeoSphere Capital Management revealed a new position in Delek holdings in the US (NYSE: DK)adding 150,000 shares valued at approximately $4.8 million, in its Nov. 14 SEC filing.
According to a filing with the Securities and Exchange Commission on Nov. 14, GeoSphere Capital Management established a new stake in Delek holdings in the US (NYSE: DK). The fund acquired 150,000 shares during the third quarter, corresponding to a position valued at $4.8 million as of September 30.
Delek’s new position represents 3.7% of GeoSphere’s $131.7 million in 13F reportable US shares.
Main participations after the presentation:
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NASDAQ: NESR: $15.3 million (11.7% of assets under management)
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New York Stock Exchange: BKV: $6.5 million (4.9% of assets under management)
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New York Stock Exchange: CCJ: $5.7 million (4.4% of assets under management)
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New York Stock Exchange: SEI: $5.6 million (4.3% of assets under management)
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New York Stock Exchange: CVE: $5.4 million (4.2% of assets under management)
As of Thursday, Delek shares were priced at $37.61, up a staggering 99% from last year and far outpacing the S&P 500’s 13% gain in the same period.
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Metric
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Worth
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Revenue (TTM)
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10.7 billion dollars
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Net Income (TTM)
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($514.9 million)
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Dividend yield
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2.7%
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Price (as of Thursday)
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$37.61
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Delek produces and markets refined petroleum products, including gasoline, diesel, aviation fuel and asphalt, while operating a network of convenience stores and logistics assets.
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The company generates revenue through refining operations, logistics services, and fuel and merchandise retail sales in multiple U.S. regions.
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It serves oil companies, independent refiners, distributors, transportation companies, the U.S. government and retail fuel consumers, primarily in the southern and southwestern United States.
Delek US Holdings is an integrated downstream energy company with a diversified portfolio spanning refining, logistics and retail operations. The company operates four refineries and a network of pipelines, storage and convenience stores, allowing comprehensive control from the supply of crude oil to the distribution of the finished product.
With a focus on operational scale and regional market presence, Delek leverages its assets to serve a broad customer base while maintaining flexibility in supply and distribution. The company’s integrated business model supports its competitive positioning in the US energy sector.
Despite Delek’s dizzying rally this year, a move into the stock still says a lot about how investors are positioning for cash flow strength rather than just momentum. For long-term investors, GeoSphere’s entry signals confidence in a refiner whose fundamentals have improved markedly: Delek posted $178 million in net income and $759.6 million in adjusted EBITDA in the third quarter, driven largely by EPA waivers for small refiners and higher crack spreads. Even excluding the one-time impact of the small refinery exemption (SRE), adjusted EBITDA remained strong at $318.6 million, underscoring a business that is burning through materially more cash than a year ago, when EBITDA was $70.6 million.
In that context, a new position makes strategic sense. Shares are still about 40% off pre-pandemic highs, but recent results show expanding margins, improved logistics performance and increased free cash flow capacity. For a fund with broad exposure to energy and industrial cycles, Delek offers asymmetric upside if the company executes its “sum of the parts” strategy and monetizes the approximately $400 million in SRE grants expected over the next six to nine months. Ultimately, Delek remains volatile, but improving operations and accelerating cash generation could make the downsides more attractive than they appear on the chart.
13F reportable assets: Securities holdings that institutional investment managers must disclose quarterly to the SEC on Form 13F.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or company.
Quarter by quarter: A comparison of financial or operating results between a fiscal quarter and the preceding quarter.
Integrated downstream energy company: A company involved in the refining, marketing and distribution of petroleum products, often controlling multiple stages of the supply chain.
Dividend yield: Annual dividend payments divided by the current share price, expressed as a percentage.
Overcoming: Achieve a higher return or growth rate than a benchmark index or peer group.
Operating scale: The ability of a company to operate efficiently at large size, often resulting in cost advantages.
Presentation: An official document submitted to a regulatory body, such as the SEC, that discloses financial or operational information.
Briefcase: Set of investments held by an individual or institution.
Bet: The ownership interest or investment that a person or entity has in a company.
TTM: The 12-month period ending with the most recent quarterly report.
Convenience stores: Outlets selling everyday items, often attached to gas stations, supplying fuel and goods to consumers.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has posts on and recommends Cameco. The Motley Fool recommends Delek Us. The Motley Fool has a disclosure policy.
Delek Stock Is Up 200% Since April: What New Signs of $4.8 Million Share Now was originally published by The Motley Fool
