This filing highlights Valero Energy's exceptional stock performance over the past two years, significantly outperforming all Magnificent Seven stocks due to widening crack spreads. The company, a crude refiner, has benefited from global fuel scarcity and disruptions, leading to record refining margins.
The filing reveals that Valero Energy (VLO) has seen its stock price surge over 200% in the last two years, far surpassing the returns of even the best-performing Magnificent Seven stocks like Alphabet (GOOGL) and Nvidia (NVDA). This outperformance is attributed to Valero's business model as a crude refiner, benefiting from exceptionally wide 'crack spreads' – the difference between crude oil input costs and refined product prices. Global fuel scarcity, exacerbated by events like the closure of the Strait of Hormuz, has driven these record margins. This indicates a strong short-term tailwind for refiners, but traders should consider the cyclical nature of refining margins and geopolitical risks that could impact crude supply or refined product demand long-term.