The Baupost Group and PBF Energy
Seth Klarman’s Baupost Group started new positions in Fidelity National Financial Inc. (FNF), Kindred Biosciences Inc. (KIN), and Alon USA Partners LP (ALDW) and increased its positions in Idenix Pharmaceuticals (IDIX) and PBF Energy Inc. (PBF).
The Baupost Group raised its stake in PBF Energy Inc. (PBF) by 1,021,466 shares to own 1,976,606 shares at the end of the fourth quarter. PBF Energy now accounts for a 1.76% position in Baupost’s portfolio.
PBF is one of the largest independent petroleum refiners and suppliers of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants, and other petroleum products in the United States. The company sells its products throughout the Northeast and Midwest of the United States, as well as in other regions of the United States and Canada, and is able to ship products to other international destinations. It currently owns and operates three domestic oil refineries and related assets, which were acquired in 2010 and 2011. Its refineries have a combined processing capacity, known as “throughput,” of approximately 540,000 bpd, and a weighted-average Nelson Complexity Index of 11.3. PBF’s three refineries are located in Toledo, Ohio, Delaware City, Delaware, and Paulsboro, New Jersey.
PBF reported fourth-quarter profit of $31.16 million (or $0.76 per share), up from $1.96 million (or $0.08 per share) in the same period last year. Revenues fell to $4.82 billion from $4.95 billion last year, missing analyst estimates. Throughput for the fourth quarter averaged approximately 458,800 barrels per day, which was at the low end of PBF’s guidance for the quarter. Throughput in the Mid-Continent averaged approximately 151,700 barrels per day, and throughput on the East Coast averaged approximately 307,100 barrels per day. Management said PBF finished a challenging year with a strong quarter and is positioned well to start 2014, as crude differentials have improved from the third quarter of 2013.
The company also announced that it will pay a quarterly dividend of $0.30 per share of Class A common stock on March 14, 2014.
In August last year, PBF Energy announced plans to spin off its logistics assets into an MLP. The company said its indirect subsidiary, PBF Logistics LP, has registered for a possible listing of its limited partnership units. PBF Logistics LP, a master limited partnership (or MLP), will comprise certain logistics assets to be contributed by subsidiaries of PBF Energy. PBF Energy Inc. will indirectly own the general partner of the proposed MLP, PBF Logistics GP LLC, as well as all of the incentive distribution rights
To learn more about investing in energy MLPs, see the Market Realist series Natural gas gathering and processing: A major business for many MLPs.