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Western Refining Inc. (WNR) is a stock with the rare double threat of both value and growth. This Zacks #1 Rank (strong buy) is trading at just 6.5x forward estimates and earnings are expected to soar by 2732% in 2011.

Western Refining is an independent oil refiner that operates 4 refineries, 3 terminals, 4 asphalt terminals as well as 155 retail service stations and convenience stores in Arizona, Colorado and New Mexico.

Western also transports petroleum products throughout the southwest.

2011 Zacks Consensus Estimates Soar

Analysts got bullish on the full year in just the last week as 2 estimates moved higher in that time.

The Zacks Consensus Estimate for the year jumped to $2.90 from $2.54 per share.

This is massive earnings growth of 2732% compared with the loss of 11 cents it saw in 2010. That is quite the turnaround.

Crude Spread Widens

Western Refining's earnings are benefiting from a widening in the crude spread, which has been near records in the second quarter.

The "crude spread" describes the difference in price between Brent crude and WTI.

This differential also affects the "crack spread" which is the price difference between crude oil and the products made from it. As the crack spread expands, the refiners will make more profit.

Shares at Multi-Year Highs

Western Refining's stock has been hot over the last year as the crude spread remained favorable.

Shares are at 2-year highs.

Super Cheap Stock

But even with investors diving in, shares are super cheap.

In addition to its low P/E of just 6.5, it has a price-to-book of 2.5. A P/B ratio under 3.0 usually indicates value.

The company also has a cheap price-to-sales ratio of only 0.2, well under the 1.0 level used to indicate a company is undervalued.

With the massive growth expected this year, and the cheap valuation, it's not surprising that Western Refining sports a PEG ratio of just 0.1.

A PEG ratio under 1.0 usually means that the company is considered undervalued, or investors simply don't believe the growth will be so great, so by that metric, Western Refining is extremely undervalued given its PEG is well under that level.

Value and Growth

Western Refining will be a stock to watch on Aug 4 when it is scheduled to report its second quarter results.

With valuations so low, Western Refining is the rare value stock that also has aggressive growth.

This Week's Value Zacks Rank Buy Stocks

Are better times still to come in the global recovery? Cascade Corporation (CASC) recently blew the Zacks Consensus Estimate out of the water in the first quarter as sales soared. This Zacks #1 Rank (strong buy) has sharply rising estimates and is very cheap, trading at just 9x forward estimates. Read the full article.

Is there anything hotter than the drilling services companies? Newpark Resources, Inc. (NR) is expected to grow its earnings by 55% in 2011. This Zacks #1 Rank (strong buy) also has attractive valuations, with a forward P/E of 13.5. Read the full article.

Who says the paper industry can't be glamorous? Kadant Inc. (KAI) is trading near multi-year highs as earnings are expected to jump by over 50% in 2011. This Zacks #1 Rank (strong buy) is also a value stock, with a forward P/E of 14.6. Read the full article.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her at

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