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Bull of the Day: HollyFrontier (HFC)

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As the market cheers the tax reform on Capitol Hill, there will be big winners and bigger winners. You’ll have to forgive my over-the-top enthusiasm here but I can’t emphasize the benefits for small caps enough. By some estimates, we’re talking about over 40% earnings growth next year. In a market fueled by earnings, that should be music to investors’ ears.

Perhaps the largest beneficiary will be small cap energy stocks. So it should come as no surprise that today’s I’ve named my Bull of the Day in this industry. I’m talking about HollyFrontier (HFC - Free Report) . HollyFrontier Corporation is engaged in refining petroleum. It produces and markets gasoline, diesel, jet fuel, asphalt, heavy products and specialty lubricant products. HollyFrontier Corporation, formerly known as Holly Corporation, is headquartered in Dallas, Texas.

HollyFrontier is a Zacks Rank #1 (Strong Buy) in an industry that currently ranks in the Top 19% of our Zacks Industry Rank. The reason for the favorable rank is the recent influx of earnings estimate revisions to the upside. Over the last thirty days, five analysts have come out and increased their earnings estimates for next year, while six analysts have done so for the current year. The bullish attitude has helped push the Zacks Consensus Estimate for the current year from $1.48 to $2.38 while next year’s number has ballooned from $2.09 to $2.88.

It’s no wonder why investors have been handsomely rewarded in this name. The huge earnings momentum has carried over to big moves in the stock. After a spike took shares up over $30 in August, the stock retraced to its 50-day moving average. From that support, the real action began. Since then, huge momentum to the upside, with virtually no retracement has taken the stock up over $50. With earnings estimates helping to fuel the fire, this could just be the first stop along the way.

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