A Big Upgrade for CVR Energy

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More top-performing CAPS members have piled on the bull train for CVR Energy (NYSE: CVI) recently, enough to upgrade it from its three- and four-star rating to the highest possible five-stars. A total of 210 members have given their opinion on CVR Energy, with many of them offering analysis and commentary explaining the recent optimism.

Although CVR's petroleum revenue dropped significantly in the first quarter, it reported its highest first-quarter operating income since going public late in 2007. It and fellow refiners like Valero (NYSE: VLO), Tesoro (NYSE: TSO), Western Refining (NYSE: WNR), and Sunoco are posting higher refining margins now that the price of crude has fallen precipitously from 2008 highs. CVR is benefiting from the oil market contango, helping its adjusted refining margins jump 20%, which helped it bring in a 38% rise in earnings.

Demand in CVR's fertilizer business has been soft, mirroring the hit taken at others like Mosaic (NYSE: MOS) and PotashCorp (NYSE: POT), as the company waits on a delayed planting season for Midwest corn farmers. Sales in the business rose 8% to $67.8 million and, similar to Terra Industries (NYSE: TRA), CVR had better urea ammonia nitrate (UAN) prices and increased ammonia volume offset by softer UAN volumes and lower ammonia prices. Along with many CAPS members and Wall Street analysts, CVR's management is confident in the fundamentals of the nitrogen business and looks for sales to pick up when planting gets under way.