WNR 1.29.2010 Reuters

8/14/2019 WNR 1.29.2010 Reuters

http://slidepdf.com/reader/full/wnr-1292010-reuters 1/8

8/14/2019 WNR 1.29.2010 Reuters


Reuters Composite RatingWe cannot guarantee that each stock will performin accordance with its rank. But we do believe thatover the long term, stocks rated Outperform (30%of all stocks we rate) will, in the aggregate,outperform stocks rated Neutral (40% of all stockswe rate), and that stocks rated Neutral will, in theaggregate, outperform stocks rated Underperform(30%). All analysis is based on publicly availablecompany financials, fundamental ratios, relativerankings of financial data and ratios, and observedsecurity prices.

Underperform Neutral Outperform

WNR shares are presently rated UNDERPERFORM.No forecast is made for the stock market as a whole.However, we do believe that whichever way the marketmoves, it is probable that shares rated UNDERPERFORMare, in the aggregate, less likely to keep pace with mostothers.

Component Rating

FundamentalQuality

O u t p e

r f o r m

N e u t r

a l

U n d e

r

TechnicalFactorsO u t p e r f o r m N e u t r a l U n d e r

ValueCatch-up

O u t p e r f o r m

N e u t r a l

U n d e r

OperationalTrends

O u t p e

r f o r m N e u t r

a l U n d e

r

"Under" = Underperform

Component WeightTypes of investment criteria differ in how usefulthey are for predicting future stock movement.Based on our research, the Composite Rankassumes these relative degrees of importance.

Fundamental Quality 36%

Technical Factors 27%

Operational Trends 13%

Value Catch-up 24%

Technical Factors: UnderperformThis rating is based on analyses of share price

movements over a variety of time periods. Wecompare performance characteristics of individualstocks with those of all the others we rate.Generally speaking, our goal is to favor up-trendinshares that have experienced recent correctionsand de-emphasize down-trending sharesexperiencing uncharacteristic periods of strength.Here is how WNR shares performed during thevarious periods we examined.

Price ChangePast 7 days -6.7%Past 30 days -3.0%Past 60 days -6.7%

Change for Past 180 Days: -32.1%

Open on 8/5/09 Close on 1/29/1

$6.73

$4.57

Change Between 60 and 30 Days Ago:-3.9%


$4.90 $4.71



$6.73$4.90



$6.73$5.60

Fundamental Quality Component: UnderperformThis rating is based on characteristics traditionally associated with "good" companies. We focus on how each companymeasures up against others, and give careful attention to recent improvement or slippage relative to other companies.TTM = Trailing Twelve Months.

Very Negative Negative Neutral Positive Very PositiveTTM Return on Investment

Improvement in TTM Return on Investment

TTM Pretax Margin

Improvement in TTM Pretax Margin

Depreciation in Excess of Capital Spending Needs

Issuance/Repurchase of Common Shares

Common Shares Dilution

Presence/Absence of Unusual Income Items

Value Catch-up Component: OutperformThis rating measures the extent to which the share price adequately reflects improving or eroding fundamentals, and favorsshares whose prices have been slower to "catch up" to improving performance measures. TTM = Trailing Twelve Months.

Very Negative Negative Neutral Positive Very PositivePrice Catch-up with TTM Earnings

Price Catch-up to TTM Sales

Price Catch-up to TTM Free Cash Flow

Price Catch-up to MRQ Book Value

Operational Trends Component: UnderperformThis rating reflects how strong a company's recent Sales and EPS (reported as per GAAP) growth have been relative to othercompanies we rate. MRQ = Most Recent Quarter. TTM = Trailing Twelve Months.

Very Negative Negative Neutral Positive Very PositiveMost Recent Quarter EPS Growth

Improvement in EPS Growth for Consecutive Quarters

Improvement in EPS Growth (MRQ vs. TTM)

Most Recent Quarter Sales Growth

Improvement in Sales Growth (MRQ vs. TTM)

Peer ComparisonThis section shows the comparison of key components between WNR and several of its peers.

Company Name (Ticker)Composite

RatingFundamental

QualityTechnical

FactorsValue

Catch-upOperational

TrendsWestern Refinin... (WNR) Underperform Underperform Underperform Outperform UnderperformValero Energy Corporati... (VLO) Outperform Neutral Underperform Outperform OutperformConocoPhillips (COP) Alon USA Energy, Inc. (ALJ) Underperform Underperform Underperform Neutral UnderperformHolly Corporation (HOC) Underperform Neutral Underperform Underperform Underperform

Western Refining, Inc. (NYSE:WNR) -- Oil & Gas Operations/Energy Reuters Company Research

Performance Rating: UnderperformReuters ratings are based on a proprietary model that leverages widely accepted statistical methods and financial concepts to select attributes shown to be strong indicators of futustock price performance and applies these to rank stocks along a normal distribution curve. Ranks for Fundamental Quality, Value Catch-up, Operational Trends and Technical Faare combined into a Composite Rating of Outperform, Neutral or Underperform.

January 29, 2010 Page

8/14/2019 WNR 1.29.2010 Reuters


Business SummaryWestern Refining, Inc. (Western Refining) is an independent crude oil refiner and marketer of refined products, andalso operates service stations and convenience stores. The Company operates in three segments: refining, retail and

wholesale. The Company owns and operates four refineries with a total crude oil throughput capacity ofapproximately 238,000 barrels per day. In addition to its 128,000 barrels per day refinery in El Paso, Texas, WesternRefining also owns and operates a 70,000 barrels per day refinery on the East Coast of the United States near Yorktown, Virginia and two refineries in the Four Corners region of Northern New Mexico with a combined throughputcapacity of 40,000 barrels per day. Its primary operating areas encompass West Texas, Arizona, New Mexico, Utah,Colorado and the Mid-Atlantic region.

Contact InfoWestern Refining, Inc. is headquartered at:6500 Trowbridge Drive, El Paso, TX, 79905

United States(915) 775-3300www.wnr.com/ Mark Cox, Investor Relations

Financial TrendsTTM = Trailing Twelve Months, * = Most Recent Quarter.

Historic Growth RatesFiscal Year Ending 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 TTM 3 Year 5 Year 10 YeSales (mil) $2,215.2 $3,406.6 $4,199.4 $7,305.0 $10,725.6 $6,504.8 46.57 NA EPS (GAAP) $0.99 $2.94 $3.11 $3.53 $0.95 ($3.58) (31.43) NA Dividends/Share $0.00 $0.00 $0.16 $0.22 $0.06 $0.00 NA NA Book Value/Share $0.00 $2.60 $7.80 $11.20 $11.97 * $8.90 66.35 NA Tangible Book Value/Sh. $0.00 $2.60 $7.79 $5.70 $6.43 * $8.07 35.19 NA Cash Flow/Share $1.05 $3.03 $3.32 $4.48 $2.62 ($1.69) (4.69) NA Free Cash Flow/Share $0.99 $2.53 $1.77 ($2.63) $0.81 $1.41 (31.49) NA

Key RatiosHistoric Averages

Fiscal Year Ending 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 TTM 3 Year 5 Year 10 Ye% Sales Growth NM 53.8 23.3 74.0 46.8 (43.4) 48.0 NA % EPS Growth NM 198.1 5.9 13.4 (73.2) (582.7) (18.0) NA % Gross Margin 5.2 8.1 8.9 7.5 4.2 6.9 6.9 6.8 % Operating Margin 3.6 6.4 7.2 5.3 1.8 (2.1) 4.8 4.8 % Tax Rate 0.0 (0.0) 35.4 29.9 24.0 NA 29.8 17.9 % Return on Assets NM 31.2 26.4 10.7 1.9 (8.3) 13.0 NA % Return on Investment NM 59.6 45.4 14.4 2.4 (10.7) 20.7 NA % Return on Equity NM 113.0 58.5 37.3 8.2 (32.6) 34.7 NA Asset Turnover NM 5.3 5.4 3.3 3.2 2.0 4.0 NA Receivables Turnover NM 22.4 25.0 21.9 30.4 16.3 25.8 NA Inventory Turnover NM 21.5 25.0 17.3 19.0 12.6 20.4 NA

Equity InformationWhether you are willing to accept companies that have or don't have major shareholders with controlling ownership blocks,multiple classes of common, or convertible debt or preferred issues is a matter of individual preference. Look here foranything along these lines that might make you more or less inclined to invest in this company.Common Stock $.01 Par, 9/09, 240M auth., 88,679,790 issd. less 698,006 shs. in Treas. @ $21.4M. Insiders own 41.9%. IPO: 1/18/06,22.5M shs. @ $17 by Banc of AmericaSecurities LLC and Deutsche Bank Securities Inc.

Analyst FootnotesLook for accounting changes, restructurings,etc.which may affect how useful historic data isinassessing future company prospects.FY '04, '05 & 09/05 Qtr share numbers are Pro Formnumbers.

Peer ComparisonThis table gives an indication of how Western Refining, Inc. stands in key respects compared with companies in the Oil & Gas Operations Industry

Company Name (Ticker)

Last Fiscal Year

Revenue (mil)

Current FiscalYear Projected

Revenue (mil)

Projected

Price/Sales Operating EPS

Current FiscalYear Projected

EPS

P/E Based onCurrent Year

Estimates

EPS % Growth

Previous 5 Years

EPS % Growt

Next 5 YearsWestern Refinin... (WNR) $10,725.6 $6,212.1 0.1 $0.95 ($0.11) NM NA Valero Energy Corporati... (VLO) $68,144.0 $78,058.7 0.1 ($0.65) $1.11 16.6 NA ConocoPhillips (COP) $152,840.0 $161,741.0 0.4 $3.24 $5.91 8.1 (10.9) Alon USA Energy, Inc. (ALJ) $5,156.7 $3,641.4 0.1 $1.72 ($1.55) NM 33.2 Holly Corporation (HOC) $5,867.7 $4,638.4 0.3 $2.38 $1.10 23.6 27.1 Tesoro Corporation (TSO) $28,309.0 $16,279.7 0.1 $2.00 ($0.53) NM 27.9 Chevron Corporation (CVX) $171,636.0 $188,961.5 0.8 $5.24 $7.50 9.6 (3.1)


Getting AcquaintedStart your analysis by learning what the company does, how well it does it, where it stands relative to peers, and whether aspects of the corporate structure or capitalization arebothersome to you.


8/14/2019 WNR 1.29.2010 Reuters


1 Year Price Chart with Bollinger Bands and Relative StrengthTechnical analysts believe a narrowing of the bands suggests a significant price movement, up or down, will soon occur. Also, many say stocks that move outside the bands and tback inside will soon move toward the opposite band. The Relative Strength Index (RSI) calculates the strength of the current price movement compared to other recent moves anmay signal when a trend is unsustainable. Technical analysts also believe RSI peaks/valleys forecast changes in share price trends.

4.90

8.70

12.50

$16.30

2.57 Average Volume

Feb' 09 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan' 10

Volume (mil)

Relative Strength Indicator

50%100%

Low: 4.45

High: 16.30

10 Year Price Chart (Monthly)

6.00

21.00

36.00

51.00

$66.00

0.03

Vol (bil)2001 2002 2003 2004 2005 2006 2007 2008 2009

5 Year Price Chart (Monthly)

6.00

21.00

36.00

51.00

$66.00

0.03

Vol (bi2005 2006 2007 2008 2009

6 Month Price Chart (Daily)

4.80

5.60

6.40

7.20

$8.00

3.22

Vol (mil) Aug' 09 Sep Oct Nov Dec Jan' 10

1 Month Price Chart (Daily)

4.64

4.94

5.24

5.54

$5.84

2.86

Vol (miJan' 10


Share Price TrendsStock price trends depict the collective opinion of the investment community. You don't have to agree with consensus views but seeing how others feel can help you decide what look for as you go further in your analysis. Consider it similar to reading a review before seeing a movie.


8/14/2019 WNR 1.29.2010 Reuters


52 Week Price History

4.90

8.70

12.50

$16.30

2.57

Average Volume


Volume (mil)

200 Day Moving Average

50 Day Moving Average

Price History

Calendar Year 2001 2002 2003 2004 2005 2006 2007 2008 20High Price NA NA NA NA NA 29.44 66.13 25.77 Low Price NA NA NA NA NA 14.33 23.60 4.50 Year End Price NA NA NA NA NA 25.46 24.21 7.76

High P/E NA NA NA NA NA 8.13 15.86 NA Low P/E NA NA NA NA NA 3.55 4.29 NA Year End P/E NA NA NA NA NA 8.13 6.82 8.19 Dividend Yield NA NA NA NA NA 0.63 0.91 0.77

Price PerformanceWhen stocks significantly beat or trail the S& P 500 or the industry, investors are looking more intently at company- specificmatters than general-market factors. In the two percentile rank columns, a high "Rank in Industry" coupled with a low"Industry Rank" could signify a hot stock in a cold industry. The reverse, is also noteworthy.

Time PeriodActual

ChangePercentChange

vs.S&P 500

vs.Industry

Rank inIndustry

IndustryRank

4 Week (0.14) (3.0)% 0.8% (1.6)% NA NA13 Week (1.04) (18.5)% (21.4)% (20.7)% NA NA26 Week (1.94) (29.8)% (35.4)% (41.4)% NA NA52 Week (7.04) (60.6)% (69.0)% (72.3)% NA NA Year To Date (0.14) (3.0)% 0.8% (1.6)% NA NA

BarChartKey Rank Key YTDR 4 Wk. WorstR Best 1R 100

Short InterestA high or increasing short interest implies that many investors expect the stock price to decline. You can treat that as awarning. Or you can disagree with the crowd and buy stocks with high short interest in anticipation of a short squeeze (a rallythat occurs when short sellers rush to buy a stock, fearing losses they might incur if they wait too long). Prospects for asqueeze are indicated by high readings in the "Days to Cover" column (which tells how many days it would take for all shortinterest positions to be covered if recent trading volume levels persist). The risk: The bears may be right. So research otheraspects of the company.

Month Shares % Outstanding Percent of Float Days to CoverDecember 2010 12,002,960 13.52 23.26 3.42November 14,363,640 16.18 27.83 5.04October 10,642,440 11.99 20.62 2.72September 8,792,320 9.91 55.65 2.54

Insider TradingInsider buying can be seen as bullish because,presumably, their company knowledge is superior.However, insider sales are less reliable becauseinsiders may sell for a variety of reasons that havenothing to do with their opinion of the stock.

In the last 6 months, there have been 2 insiderpurchases for a total of 80,000 shares, and there hasbeen 1 insider sale of 5,000 shares.

Net Change (6 months) 0 6 Month Net Transactions

Institutional OwnershipIt's worthwhile to know what institutions are doin

simply because their stock positions can be solarge. In the short term, stocks will perform well iinstitutions are buying and perform poorly if institutions are selling.

289 institutions own 38.7% of the 0.09 billion commshares outstanding. This is lower than the averageinstitutional ownership of the Oil & Gas OperationsIndustry at 39.6%, and lower than the average of theS&P 500 as a whole which is 66.1%.Net Change (3 month) (9.Net Purchases (3 month) (7.96)Shares Purchased (3 month) 6.38 mShares Sold (3 month) 14.34 m


General Sentiment You can follow popular opinion or choose a contrarian's strategy. Either way, you should know whether the Street is bullish or bearish. Investor sentiment is typically positive whthe 50-day moving average is rising, especially if it's also above the 200-day moving average. Additionally, changes in price trend can be deemed more definitive if supported byhigher than normal volume.


8/14/2019 WNR 1.29.2010 Reuters


Viewing Things In ContextMany people erroneously work with valuation ratios calculated based on numbers that aren't truly representative of a company's underlying sustainable financial characteristics. Tit's important to determine if today's sales and EPS are significantly depressed or elevated due to temporary factors such as business cycles. Higher ratios can be tolerated if sales EPS are temporarily depressed. But if the company is experiencing unsustainable boom conditions, seek lower ratios. GAAP = Generally Accepted Accounting Principles.

Fiscal Year Ending 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09E 12/31/10ESales/Share NA NA $32.38 $49.80 $63.84 $108.07 $158.30 $91.68 $113Price/Sales NA NA NA NA 0.40 0.20 0.05 0.05 EPS (GAAP) NA NA $0.99 $2.94 $3.11 $3.53 $0.95 ($0.11) (P/E (GAAP) NA NA NA NA 8.22 6.00 8.60 NM EPS (Normalized) NA NA $0.99 $2.94 $3.11 $3.54 $0.95 ($0.11) (P/E (Normalized) NA NA NA NA 8.22 5.99 8.60 NM Dividend Yield (%) NA NA NA NA 0.63 1.04 0.74 0.00

Valuation Based On GrowthThe faster a company grows, the higher its stock's P/E can be. Contrary to popular belief, PEG (P/E over Growth Rate) need not always be 1.00 or less. But all else being equal, lbetter (and 3.00 is usually too high). Try to favor company PEGs that are lower than industry and market PEGs. In all cases, watch for very high growth estimates. If overly optimprojections get cut, PEG would wind up being higher. FY = Fiscal Year.

Price/EPS (Est.) for Current FY Price/EPS (Est.) for Next FY Long Term Growth Estimate Next FY P/E over LT GWestern Refining, Inc. NM NM NA NAOil & Gas Operations 22.75 17.93 10.01 2.08S&P 500 16.34 13.30 10.11 1.73

Comparative Valuation Ratios Valuation below industry or S& P 500 averages can be attractive - unless the company is materially worse in terms of qualitygrowth prospects. Year-by-year trends in comparative valuations can give clues about company merit. Be especially on guardif comparative ratios are deteriorating over time. On the other hand, relatively low valuations that are moving toward theaverages might indicate that the market is tuning in to heretofore under-appreciated company merit.FY = Fiscal Year, TTM = Trailing Twelve Months, * = Most Recent Quarter.Western Refining, Inc.

Price/Earnings

Price/Sales

Price/Book

Price/Cash Flow

Price/Tang. Book

Price/FreeCash Flow

Trailing 12 Months NA 0.06 * 0.51 NA * 0.57 3.90FY Ending 12/31/08 8.60 0.05 0.68 3.11 1.27 10.02FY Ending 12/31/07 6.00 0.20 1.89 4.73 3.72 (8.07)

FY Ending 12/31/06 8.22 0.40 3.28 7.71 3.29 14.44FY Ending 12/31/05 NA NA NA NA NA NA

Bar Chart Key2005 R TTM

Oil & Gas OperationsPrice/

EarningsPrice/Sales

Price/Book

Price/Cash Flow

Price/Tang. Book

Price/FreeCash Flow

Trailing 12 Months 32.45 3.87 * 2.66 13.43 * 2.99 45.22FY Ending 2008 11.83 1.98 1.43 9.83 1.52 (0.28)FY Ending 2007 20.42 3.70 3.00 9.03 2.92 5.73FY Ending 2006 13.86 3.00 3.15 7.11 2.66 2.61FY Ending 2005 16.97 3.74 3.55 8.83 3.58 7.40


S&P 500Price/

EarningsPrice/Sales

Price/Book

Price/Cash Flow

Price/Tang. Book

Price/FreeCash Flow

Trailing 12 Months 20.49 2.34 * 3.48 14.01 * 5.59 22.02FY Ending 2008 16.58 2.24 3.33 9.73 3.32 22.14FY Ending 2007 22.59 2.84 4.14 15.21 5.87 27.09FY Ending 2006 20.69 2.92 3.84 14.04 5.31 30.00FY Ending 2005 23.63 3.27 4.32 16.15 6.12 21.48


DividendsDividend is the most classic basis forstockvaluation, and high dividend yields areusuallydeemed preferable. Today, with manycompaniesreinvesting profits back into thebusiness, moderateor low yields can be accepted idividends growrapidly. The main risk is that poorperformance willcause the dividend to be cut oromitted. A very highpayout ratio is one warningsignal. Another is ayield that is very high relative industry peers.TTM = Trailing Twelve Months.

WNR IndustrCurrent Dividend Yield NA 5 Yr. Avg. Dividend Yield NA 5 Yr. Dividend Growth Rate NA 2TTM Payout Ratio NA 265 Yr. Average Payout Ratio NA 1

Liquid AssetsGet a general sense of the extent to which thestockprice is offset by the presence of assets thatcan beconverted to cash immediately or in the neafuture. Often, these ratios will not be meaningful.Most companies are valued as ongoing businessesrather than liquidation/buyout prospects. If you'relookingat an especially troubled company, be awathat seemingly liquid-asset windfalls can bedissipatedby continuing operating losses and/orshutdown costs.

Price to ... WNR IndustGeneral Working Capital 1.3 (current assets minus current liabilities)

Net Working Capital (0.3) (current assets minus all liabilities)

Cash (& cash equivalents) 6.2 2Cash minus total debt (0.4) (Cash minus all liabilities (0.2)


Stock Price RationaleDetermine if the stock price is justified by: growth-based value, comparative value, liquid assets, or dividends. The better the company, (in terms of growth or quality), the highervaluation measures can be. And if valuation ratios are extremely low, double-check to see if the company appears excessively weak. In any case, you don't have to say yes to anyvaluation measure - many buy shares based on other factors (e.g., growth). But if you do that, at least understand what you're doing and consider the risks.


8/14/2019 WNR 1.29.2010 Reuters


Estimates In ContextBelow are the present consensus revenue and EPS estimates. Notice whether analysts expect recent year-to-year growth trends to persist, or are forecasting sharp improvement ordeterioration. The sharper the predicted change, the greater the level of uncertainty in the forecast. (GAAP = Generally Accepted Accounting Principles)

Revenue ($mil) GAAP Earnings Per Share ($)Mar 31st Jun 30th Sep 30th Dec 31st Year Total Mar 31st Jun 30th Sep 30th Dec 31st Year Total

FY Ending 12/2006 881.5 1,156.5 1,174.1 987.4 4,199.4 (0.32) 1.29 1.30 0.76 3.1FY Ending 12/2007 994.0 1,659.2 2,232.9 2,419.0 7,305.0 0.93 2.29 0.69 (0.38) 3.5FY Ending 12/2008 2,551.1 3,352.5 3,165.3 1,656.7 10,725.6 (0.60) 0.12 1.60 (0.19) 0.9FY Ending 12/2009 1,368.2 1,583.5 1,896.3 1,690.6 E 6,212.1 E 0.86 (4.20) (0.05) (0.69) E (0FY Ending 12/2010 1,969.6 E 2,029.5 E 2,144.0 E NA E 7,664.3 E (0.17) E 0.10 E 0.01 E 0.02 E

Confidence In EstimatesThe range of estimates can be measured by standard deviation. The narrower the range (the lower the standard deviationcompared to the "mean" estimate) and/or the greater the number of analysts, the more definitive the expectations. Note, too,the extent to which company expectations are consistent with or diverge from those for industry and/or market.

Long Term Growth Rate Near Term Growth RateMean # of Estimates Standard Dev. Mean # of Estimates Standard Dev.

NA NA NA WNR NA 6 4.6310.0 2 2.73 Industry 18.2 9 23.9510.1 5 3.20 S&P 500 0.2 12 7.41

ReasonablenessLook at the tables below to see if analysts are expecting the company to accomplish more than it has accomplished in thepast. Such things can and do happen. But the stronger the predicted future (compared to the past), the greater the burden of proof on the part of those issuing the estimates.

Annual Growth EPS (%) Sales (%) Quarterly Growth EPS (%) Sales (%)5 year Estimate NA NA 03/10 qtr. Estimate NA 44.02009 Estimate NA (42.1) 12/09 qtr. Estimate NA 2.0Last 5 years NA NA 09/09 qtr. NA (40.1)Last 3 years (31.4) 46.6 06/09 qtr. NA (52.8)Last Year (73.2) 46.8 03/09 qtr. NA (46.4)Trailing 12 Months (582.7) (43.4) 12/08 qtr. NA (31.5)

Analyst Recommendation TrendsDifference of opinion is normal, so don't demand unanimity. Look for ratings clusters in a part of the best-to-worst scale andat Mean Rating scores. Also important is whether analyst sentiment is improving or declining over time.

Buy(Value 1)

Outperform(Value 2)

Hold(Value 3)

Underperform(Value 4)

Sell(Value 5)

MeanRating

As of 1/29/10 0 0 4 2 0 3.33 As of 4 Weeks ago 0 0 5 2 0 3.29 As of 8 Weeks ago 0 0 6 2 0 3.25 As of 12 Weeks ago 0 0 6 1 0 3.14

Bar Chart Key Mean Rating12 Wks agoR 1/29 1.00 = Best

5.00 = Worst

EPS Estimate AccuracyAssess the extent to which analysts areaccurateand have a handle on the earning trendsbycomparing Estimates to Actual figures (whichmayomit various charges/credits included inGAAPresults). The Actual figures are the ones thaaremost comparable in accounting method to theEstimates. (GAAP = Generally Accepted AccountPrinciples)

Quarter Estimate Actual GAA09/09 qtr. ($0.06) ($0.05) ($0.006/09 qtr. ($0.15) ($0.11) ($4.203/09 qtr. $0.84 $0.86 $0.812/08 qtr. $0.46 $0.44 ($0.1909/08 qtr. $1.11 $1.62 $1.6

Quarterly EPS Estimate Revisions

12/09 qtr.

b May Aug Nov

There is currently not enough data available to usto display quarterly EPS estimate revisions.

03/10 qtr.

b May Aug Nov


06/10 qtr.

b May Aug Nov


Annual EPS Estimate RevisionsSince estimates address an unknowable future, revision (often prompted by company guidance) is to be expected. Investors are usually happy when analysts are scrambling to chareality upward. So increases in estimates tend to spark strong share price performance. The reverse is usually true when estimates are falling.

-0.48

0.48

1.44

2.40

$3.36

4.63

8.23

11.83

$15.43


FY 2006

Gap in Coverage Positive SurpriseNegative Surprise As Expected EPS


Expectations And CredibilityIn theory, stock prices are based on the "present value" of expected future company cash flows. Therefore, we try to obtain accurate estimates of future financial performance. Buremember, these are just estimates. Since we cannot really know what will happen tomorrow, we evaluate estimates critically by seeking clues that help us distinguish betweennormal versus excessive degrees of uncertainty.


8/14/2019 WNR 1.29.2010 Reuters


Growth Rates (%)Investors are accustomed to looking at EPS growth. Check sales growth, too. EPS gains can't persist indefinitely without good sales growth. Do further investigation if sales trendfalling short. (A big short fall might reflect a divestiture. On the other hand, if sales growth looks too good, check to see if it's being boosted by an acquisition.) Also, compare sagrowth to capital spending growth. Over a prolonged period, it's reasonable to expect capital spending growth to more or less keep pace with sales growth. If the latter is significahigher, capital spending may have to accelerate in the next few years.

% Growth Rate WNR Industry Sector S&P 500Company Rank

in IndustryWNR

vs. IndustryWNR

vs. SectorWNR

vs. S&P 500Sales Growth For Most Recent Quarter (40.1) (38.9) (32.4) (1.8) 58Sales Growth For Trailing 12 Months (43.4) (30.4) (25.6) (5.5) 48Sales Growth For Past 5 Years NA 30.7 22.2 11.2 74 NA NA NA

Capital Spending Growth for Past 5 Years NA 41.2 17.4 (2.6) 81 NA NA N

EPS Growth for Most Recent Quarter (103.4) (55.3) (48.2) 9.7 NAEPS Growth for Trailing Twelve Months (582.7) (44.7) (38.7) (0.8) NAEPS Growth for Past 5 Years NA 31.1 28.1 15.2 12 NA NA NA

WorstR Best = Co. underperforming = Co. outperform

Company Quality

Some companies excel in obtaining high margins (watch out for very low tax rates, which may reflect special benefits that often won't persist indefinitely) while others are highlyefficient. Still others are strong in both respects. These trade-offs are balanced in the Management Effectiveness returns, which combine both factors. TTM = Trailing Twelve Mo

Profitability Ratios (%) WNR Industry Sector S&P 500Company Rank

in IndustryWNR

vs. IndustryWNR

vs. SectorWNR

vs. S&P 500Gross Margin for Trailing Twelve Months 6.9 61.7 40.1 46.0 10Gross Margin for Past 5 Years NA 63.8 40.9 45.6 9 NA NA NAOperating Margin for Trailing Twelve Months (2.1) 6.9 10.4 16.2 40Operating Margin for Past 5 Years NA 31.5 21.9 18.9 42 NA NA NAEBITD Margin for Trailing Twelve Months 0.0 36.8 23.0 22.0 25EBITD Margin for Past 5 Years NA 48.1 30.7 23.1 52 NA NA NAPretax Margin for Trailing Twelve Months (4.0) 11.6 10.3 15.3 30Pretax Margin for Past 5 Years NA 28.9 20.7 17.8 43 NA NA NANet Margin for Trailing Twelve Months (4.1) (8.4) 2.1 10.1 39Net Margin for Past 5 Years NA 18.6 13.4 12.5 47 NA NA NAEffective Tax Rate for Trailing Twelve Months NA 29.3 33.3 29.1 NA NA NA Effective Tax Rate for Past 5 Years NA 33.2 34.6 30.2 43 NA NA N

Efficiency Ratios (TTM) WNR Industry Sector S&P 500Company Rank in Industry WNRvs. Industry WNRvs. Sector WNRvs. S&P 500 Asset Turnover 2.0 0.5 0.8 0.9 96Receivables Turnover 16.3 7.5 8.6 10.4 94Inventory Turnover 12.6 10.4 13.5 11.3 60Revenue/Employee $1,971,138 $2,183,345 $2,274,654 $775,890 81Net Income/Employee $(80,606) $252,117 $189,240 $93,049 NA

Management Effectiveness Ratios (%) WNR Industry Sector S&P 500Company Rank

in IndustryWNR

vs. IndustryWNR

vs. SectorWNR

vs. S&P 500Return on Assets for TTM (8.3) (4.9) 2.1 6.8 NAReturn on Assets for Past 5 Years NA 8.5 11.7 8.7 NA NA NA NAReturn on Investment for TTM (10.7) (4.8) 3.2 9.7 NAReturn on Investment for Past 5 Years NA 10.1 14.8 12.5 87 NA NA NAReturn on Equity for TTM (32.6) (7.3) 4.7 17.0 42Return on Equity for Past 5 Years NA 18.4 24.0 20.3 NA NA NA NA


Financial StrengthQuick Ratio (cash and marketable securities divided by current liabilities) and Current Ratio (all current assets divided by current liabilities) give a sense of how readily the compcould cover current obligations if the sales were to stop. Higher ratios indicate greater liquidity. Different businesses have different cash inflow-outflow characteristics, so comparcompanies to industry averages. Similar comparisons are relevant for debt ratios (higher ratios indicate more debt and, hence, more financial risk) and interest coverage (lowernumbers signify greater risk).

WNR Industry Sector S&P 500Company Rank

in IndustryWNR

vs. IndustryWNR

vs. SectorWNR

vs. S&P 500Quick Ratio 0.7 1.3 1.0 1.4 59Current Ratio 1.5 1.7 1.6 2.0 71Total Debt to Equity 136.2 74.8 43.2 77.0 18Long Term Debt to Equity 134.5 71.5 40.4 69.8 12Interest Coverage (1.1) (0.7) 2.6 12.2 68



Footprints of SuccessIn many respects, business success requires subjective judgment. However, over time, good companies tend to leave good footprints, which become most visible when company dis compared to industry/sector/market benchmarks. That's how you see when companies perform well, not just because a rising business tide lifts all boats, but because the compais doing unique, good things. Look, too, at time-series comparisons, and take note of companies that are improving faster or suffering less than peers.


WNR 1.29.2010 Reuters

Documents

Transcript of WNR 1.29.2010 Reuters