VanEck Vectors Oil Refiners ETF (CRAK - Free Report) topped the list of the best-performing ETFs of July, with impressive returns of about 10.9%. The rally was mainly driven by a wider Brent-WTI spread and solid corporate earnings.
Brent-WTI spread has increased from $3.31 per barrel at the end of June to $4.23 per barrel as of Jul 30. As oil refiners use oil (WTI) as an input for processing refined petroleum products like gasoline, they benefit from the higher spreads (selling at Brent price) leading to healthy margins. The higher the spread, the more the profits will be for oil refiners.
Investors should note that oil refiners are negatively correlated with the price of oil and generally benefit from lower oil prices. Further, strong earnings from players in this industry also boosted the appeal for the ETF (read: Refiners ETF Hits New 52-Week High).
Let’s take a closer look at the fundamentals of CRAK.
CRAK in Focus
It is a one-stop shop for investors to play the global oil refining market. CRAK looks to follow the MVIS Global Oil Refiners Index, which measures the overall performance of companies involved in crude oil refining including gasoline, diesel, jet fuel, fuel oil, naphtha, and other petrochemicals.
The fund holds 26 stocks in its basket and focuses on large-cap stocks accounting for 91.7% of the portfolio while mid caps take the remainder. American firms account for 34.9% share, while Japan (14.9%) and India (7.3%) round off the next two spots. The product has amassed $61.4 million in its asset base and trades in a lower average daily volume of around 22,000 shares. The expense ratio comes in at 0.59% (see: all the energy ETFs here).
Though most of the stocks in the fund’s portfolio delivered strong returns, a few American stocks outperformed. Below we have highlighted those five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Best Performing Stocks of CRAK
Marathon Petroleum Corporation (MPC - Free Report) : The stock has surged about 16.2% this month. It currently carries a Zacks Rank #3 (Hold) and has a VGM Score of B. The stock has seen solid earnings estimates revision of 23 cents in a month for this year and has estimated earnings growth rate of 31.32%. MPC occupies the fifth spot in the fund’s basket with 6.5% of the total assets (read: Energy ETFs to Surge on Marathon Petroleum-Andeavor Deal).
Andeavor Corp : This stock takes the sixth position in the fund’s basket with 5.5% allocation. It has also delivered solid returns of 15% in July. The Zacks Consensus Estimate for 2018 has come down by 71 cents in a month but represents a year-over year increase of 34%. Andeavor has a Zacks Rank #3 and a VGM Score of B.
PBF Energy Inc. (PBF - Free Report) : This stock takes the #20 spot in the fund’s basket, with 1.9% of the assets. It has gained 11% this month and has seen negative earnings estimate revision of 61 cents for this year over the past 30 days. However, its earnings are expected to increase 149.12% for this year. PBF Energy currently has a Zacks Rank #3 and a VGM Score of D.
HollyFrontier Corporation (HFC - Free Report) : The stock is up nearly 9.5% in July. It carries a Zacks Rank #2 (Buy) and a VGM Score of B. The stock has seen negative earnings estimate revision of 45 cents for this year over the past month and its earnings are expected to grow 143.1%. The stock occupies the tenth position and accounts for 4.3% share in CRAK. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Phillips 66 (PSX - Free Report) : The stock has gained about 8.7% this month. It has seen negative earnings estimate revision of three cents for this year over the past month with an expected earnings growth rate of 59.36%. Phillips 66 currently has a Zacks Rank #3 and VGM Score of A. The stock occupies the top position in the fund’s portfolio, making up for 8.1% share.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>