QUARTERLY EPS CHANGE (THIS QUARTER VS. SAME QUARTER LAST YEAR): [PASS]
Although TSO's EPS growth for this quarter relative to the same quarter a year earlier (1.16%) is below the minimum 18% that this methodology likes to see, earnings have been accelerating over the past 4 quarters. This is a very positive sign, and therefore TSO passes the first requirement.
ANNUAL EARNINGS GROWTH: [FAIL]
This methodology looks for annual earnings growth above 18%, but prefers higher than 25%. TSO's annual earnings growth rate over the past five years of 7.41% fails this test.
EARNINGS CONSISTENCY: [PASS]
According to this methodology, each year's EPS numbers should be better than the previous year's. One dip is allowed, but the following year's earnings should be a new high. TSO, whose annual EPS before extraordinary items for the last 5 years (from earliest to the most recent fiscal year) were -1.01, -0.21, 4.02, 6.19, 2.86, passes this criterion. The one dip is considered acceptable, as earnings quickly rebounded after the decline.
LONG-TERM EPS GROWTH RATE RELATIVE TO GROWTH IN THE LATEST 2 QUARTERS: [FAIL]
This methodology looks unfavorably at any company whose earnings growth in the latest 2 quarters has been less than half of the long-term earnings growth rate. TSO fails this criterion, as earnings growth in the 2 most recent quarters (-11.94% for Q6 to Q2 and -1.2% for Q5 to Q1) have slowed substantially to a point less than its long-term growth rate of 7.4%.
CURRENT PRICE LEVEL: [FAIL]
Investors should keep an eye open for stocks that are trading within 15% of their 52-week highs, as it is likely to continue in its upward trend. TSO's pricing data is not available, hence an opinion cannot be rendered at the current time.
4 MONTH S&P RELATIVE STRENGTH LINE: [FAIL]
This methodology likes to see confirmation from this indicator when buying as a sign of a company's recently strong momentum. It shows a company's weekly performance in comparison to the overall market, as measured by the S&P 500. Look for a general upward trend in weekly relative strength, as the best stocks usually act better than the overall market. TSO's relative strength trend has been declining over the last 4 months. This is a negative sign.
PRICE PERFORMANCE COMPARED TO ALL OTHER STOCKS: [PASS]
A company's weighted relative strength, which is the stock's price performance compared with the overall market over the past year, should be no less than 80, although above 90 is preferred. As long as all the other numbers are in check, these companies should continue to perform well over the next 3 months. TSO's relative strength of 80 is at an acceptable level, and therefore passes this test.
CONFIRM AT LEAST ONE OTHER LEADING STOCK IN THE INDUSTRY: [PASS]
Make sure that a company's industry is attractive by confirming that at least one other company in the industry has a relative strength above 80. There is confirmation in TSO's industry (Oil & Gas Operations), as there are 66 companies that have a relative strength at or above 80.
LOOK FOR LEADING INDUSTRIES:
DECREASING LONG-TERM DEBT/EQUITY: [PASS]
Companies who have consistently cut debt over the last 3 years, or who have a Debt/Equity ratio less than 2, are looked at favorably. TSO, which has a Debt/Equity ratio of 0.70%, passes this test.
RETURN ON EQUITY: [FAIL]
Preferred companies must have a ROE of at least 17%. TSO's ROE of 8.3% is below the minimum 17% that this methodology likes to see, and therefore fails the criterion.
SHARES OUTSTANDING: [NEUTRAL]
Shares outstanding should be less than 30 million, as fewer shares mean bigger price jumps when demand surges. However, there is no penalty for a large number of shares outstanding as long as all the other parameters are met. Although TSO exceeds the preferred level with shares outstanding of 132 million, the stock still passes the test.
INSIDER OWNERSHIP: [FAIL]
Companies with the best prospects have strong insider ownership, which we define as 15% or more. When there is strong insider ownership, management is more likely to act in the best interest of the company, as their interests are right in line with that of the shareholders. Insiders own 0.43% of TSO's stock. Management's representation is not large enough and fails this test.
INSTITUTIONAL OWNERSHIP: [PASS]
Some institutional ownership is preferred, but there is no indication that a large number of institutions is too many. Institutions own 89.62% of TSO's stock. Because there is some institutional ownership present, TSO passes this test.