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Florida-based GeoSphere Capital Management initiated a 150,000-share stake in Delek during the third quarter.
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The resulting position was worth approximately $4.8 million at quarter end and represented 3.7% of 13F’s reportable assets under management.
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This holding is not one of GeoSphere’s top five holdings.
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Florida-based GeoSphere Capital Management has unveiled a new position in Delek US Holdings (NYSE:SDK)adding 150,000 shares valued at approximately $4.8 million, in its Nov. 14 filing with the SEC.
According to a filing with the Securities and Exchange Commission dated November 14, GeoSphere Capital Management established a new stake in Delek US Holdings (NYSE:SDK). The fund acquired 150,000 shares during the third quarter, corresponding to a position valued at $4.8 million as of September 30.
Delek’s new position represents 3.7% of GeoSphere’s $131.7 million in 13F reportable U.S. equities.
Main headlines after filing:
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NASDAQ: nesr: $15.3 million (11.7% of AOM)
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NYSE: BKV: $6.5 million (4.9% of AOM)
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NYSE: CCJ: $5.7 million (4.4% of assets under management)
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NYSE: SEI: $5.6 million (4.3% of assets under management)
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NYSE: CVE: $5.4 million (4.2% of assets under management)
As of Thursday, Delek shares were priced at $37.61, up a staggering 99% over the past year and a much better performance than the S&P 500’s 13% gain over the same period.
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Metric
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Value
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Revenue (TTM)
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$10.7 billion
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Net Income (TTM)
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($514.9 million)
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Dividend yield
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2.7%
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Price (from Thursday)
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$37.61
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Delek produces and markets refined petroleum products, including gasoline, diesel, aviation fuel and asphalt, while operating a network of convenience stores and logistics assets.
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The company generates revenue through refining operations, logistics services, and fuel and commodity retailing in several regions of the United States.
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It serves oil companies, independent refiners, marketers, transportation companies, the U.S. government and retail fuel consumers primarily in the South and Southwest United States.
Delek US Holdings is an integrated downstream energy company with a diversified portfolio spanning refining, logistics and retail operations. The company operates four refineries and a network of pipelines, storage and convenience stores, providing end-to-end control from crude oil sourcing to finished product distribution.
With a focus on operational scale and regional market presence, Delek leverages its assets to serve a broad customer base while maintaining flexibility in sourcing and distribution. The company’s integrated business model supports its competitive positioning in the U.S. energy sector.
Despite Delek’s meteoric rally this year, an entry into the stock speaks volumes about how investors are positioning themselves based on cash flow strength rather than momentum alone. For long-term investors, GeoSphere’s entry signals confidence in a refiner whose fundamentals have improved significantly: Delek reported net income of $178 million and adjusted EBITDA of $759.6 million in the third quarter, largely thanks to exemptions granted to small refineries by the EPA and higher crack spreads. Even excluding the one-time impact of the small refinery exemption (SRE), adjusted EBITDA remained strong at $318.6 million, highlighting a company that is wasting significantly more cash than a year ago, when EBITDA was $70.6 million.
In this context, a new position makes strategic sense. The stock is still down about 40% from pre-pandemic highs, but recent results show expanding margins, better logistics performance and increasing free cash flow capacity. For a fund with broad exposure to cyclical energy and industrial stocks, Delek offers asymmetric upside potential if the company executes on its “sum of the parts” strategy and monetizes the approximately $400 million in SRE grants expected over the next six to nine months. Ultimately, Delek remains volatile, but improving operations and accelerating cash generation could make dips more attractive than they appear on the chart.
Assets to be declared 13F: Securities that institutional investment managers must disclose quarterly to the SEC using Form 13F.
Assets under management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Quarter to quarter: A comparison of financial or operating results between a fiscal quarter and the preceding quarter.
Downstream integrated energy company: A company involved in the refining, marketing and distribution of petroleum products, often controlling several stages of the supply chain.
Dividend yield: Annual dividend payment divided by the current stock price, expressed as a percentage.
Outperforming: Achieve a higher return or growth rate than a benchmark or peer group.
Operational scale: The ability of a business to operate efficiently at scale, often resulting in cost advantages.
Deposit: A formal document submitted to a regulatory agency, such as the SEC, disclosing financial or operational information.
Wallet: Set of investments held by an individual or an institution.
Bet: The ownership interest or investment that a person or entity has in a business.
TTM: The 12-month period ending with the most recent quarterly report.
Convenience stores: Retail outlets selling everyday items, often attached to gas stations, supplying fuel and merchandise to consumers.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool holds positions with and recommends Cameco. The Motley Fool recommends Delek Us. The Motley Fool has a disclosure policy.
Delek Has Raised Its Stock 200% Since April: What New $4.8M Bet Signals Now was originally published by The Motley Fool
