August 3rd, 2020 at 12:41 PM ^
Speedy Rewards - best customer loyalty program in the business. Also, best gas station breakfast sandwiches in America. Worth $21 billion just for that...
August 3rd, 2020 at 12:46 PM ^
I agree with your assessment of Speedy Rewards. I have been using the CC to accumulate and then instantly pay off. Its an amazing rewards program.
I used Speedway and their rewards card for a long time until I got a Costco membership (with the Costco Visa). I still use the Speedway when unable to go to a Costco station, but that has been the better deal for gasoline.
August 3rd, 2020 at 12:49 PM ^
Casey's General Stores would like to have a word with you regarding their breakfast pizza. You did say sandwich, though, so I suppose we are talking about different things.
August 3rd, 2020 at 12:50 PM ^
What? Maybe I was doing it wrong 10+ years ago. I quit going to Speedway because even though I would put a thousand + gallons of gas on my Speedy Rewards card a year it seemed like all I could ever redeem them for was a stick of gum from the bottom of the cashier's purse or a small styrofoam cup to fill with water from the bathroom sink.
Seriously. I thought back then their rewards program was total shit and a scam. I've avoided Speedways like the plague ever since. Mainly because the damn places are always packed. Oh well. I'm a J&H man now.
August 3rd, 2020 at 12:57 PM ^
Im getting approximately 4.5 percent cash back per dollar spent, not including all the free crap you get. Its solid. Of course, i calculated that like 3 years ago, not sure what my rate is now.
I use my CC just there (gas/merchandise) and use another card other places.
Dang. Maybe I'll have to revisit it. If my account is still active I've got a lot of points on there. If they're actually giving you things now unlike before maybe it's worth a look.
I think you get 2-3% off the listed price at purchase time (so $2.50 pump price you pay ~$2.43-$2.45... 5cent discount) + you get Speedy points that you can apply to later purchases. For me the Speedy points amounted to a half a tank of gas every 6 months for free.
Meah
Sounds like you were just using the Speedy Rewards card when buying gas and not the Speedy Rewards Credit Card. It is HUGE difference in the amount of points you get. I have the Speedy Rewards CC and get all my gas at Speedway. Once I hit 38,000 points I usually get the $50 Speedy Gift Card. Best bang for the buck IMO. Can't use the GC for gas though.
August 3rd, 2020 at 12:52 PM ^
They are terrific. Great selection on frozen drink/slurpee knockoffs as well.
**I heard a very ugly rumor yesterday the $1 Sausage and cheese breakfast sandwiches were going to be discontinued. And were only a limited time item. The clerk told me to draw loyalty and hook people into the more expensive options with the eggs.
Hopefully 7/11 brings in more slurpee flavors at Speedway.
Also to train Speedway operators how to operate slurpee machines more effectively.
Do my 527,000 points now convert to yen?
Sir! Wawa breakfast sandwiches are the best and anything else is heresy!
I don't remember seeing a Wawa gas station in Michigan when I lived there so this might be a southern thing unfortunately. Also for those who don't know, Wawa makes a mean submarine sandwich too. Best sandwich you can buy at 2am on a Saturday night. No contest.
Sheetz >>>> WaWa
Fight me.
Sheetz MTO.... gets my vote.
Have you had The Gobbler at Wawa in the fall?
Nothing beats a good gobbler.
What the heck is a Wawa? Sounds like the sound a guitar makes.
August 4th, 2020 at 12:11 AM ^
WaWa is the standard by which all gas station food should be measured - unless you are lucky enough to eat at Sheetz.
Both are PA companies. WaWa is Philly and the suburbs while Sheetz is everything west of Philly’s ‘burbs.
We do not talk about Turkey Hill.
August 3rd, 2020 at 12:45 PM ^
Sounds like a good deal for Marathon, but in all seriousness, the money is in the convenience store side of that business, not the sale of petroleum products. Makes sense that a petroleum company would want to sell off that liability to an independent company that may better manage the convenience store business and they can still sell marathon petroleum products to the new owner. Win, win, win for Marathon.
I've never understood how those little stores make that much money. Packs of gum and bags of chip must have some nice margins.
When you consider that a bag of chips is mostly air (or "snackmosphere" as Rich Hall called), yes, there are some good margins there.
Good margins at baseline that then adds a convenience mark up across a wide range of products (tobacco, lottery tickets, pop bottles and dispensers, coffee, donuts, automotive, etc.), the amount of traffic gasoline/diesel brings in and that there isn’t that much labor cost involved. One or two people and a manager usually operate the store. Might be making a little on every item sold, but they also sell a lot of items everyday all day.
August 3rd, 2020 at 12:50 PM ^
Your house is probably worth more than you have in the bank, that’s how it makes sense. Not too crazy of a concept.
Can you elaborate on that please? Maybe I'm not following your logic, but that isn't how company valuations work and seems a really bad comparison. But again, maybe I'm missing something.
Except they're not saying Marathon HAS $24 billion, they're saying it's WORTH $24 billion. Theoretically, that $24 billion includes the $21 billion value of the chunk they're selling, whereas the money in the bank is exclusive of the value of the house you have, right? Those don't seem like the same thing at all.
In this example - "your" market cap would include the value of the house and the debt on the house - as well as your bank account. I assume there is debt tied to speedway so Marathon isn't making the entire 21B - some number less than that.
August 3rd, 2020 at 12:57 PM ^
I think it's clearer today than it's been in the past decade that "valuation" of companies is some mix of fraud, funny math, optimism, and alcohol.
As Elon Musk sits in the corner laughing his ass off.
I know nothing at all about this deal, specifically, but I remember discussing the "control premium" in my corporate organization class in grad school.
Generally, the total valuation of a company measured by its stock price multiplied by total number of shares understates the actual worth of the corporation because the stock price itself is only meant to capture the worth of an individual share.
If you buy enough shares though, you will gain control of the company, and this control is actually worth extra. Investors will pay a premium for control of the company if they believe that the company can do better under their control than it is doing now.
What's clear from this deal is that someone values Speedway very highly, and likely thinks the current managers are incompetent. They could be right, or they could be entirely wrong.
“What's clear from this deal is that someone values Speedway very highly...”
7-11 does...built in brick&mortar outlets for their brand.
Big oil companies are crazy profitable... And crazy bad for the environment. I would like to see some move away from oil, but there aren't a lot of alternatives worth the effort at scale. Until that changes, big oil will command big money.
Nuclear is the obvious solution, but how dare anyone suggest oil companies make less money in consecutive quarters.
EDIT: this is not a criticism of the post to which I am replying.
I was going to mention that nuclear is a big, huge, preference of mine. But it doesn't seem relevant to replacing gas engines. Maybe I limited my vision too far? I dunno... But I am a big, huge, proponent of nuclear technologies.
Hydrogen is a great alternative to petroleum and it has comparable energy density. You can even retrofit an internal combustion engine to run on hydrogen. Just use the electricity that your nuclear power plant produces to do mass scale hydrolysis and voila, you're running your car on nuclear power. On days when the sun is shining or the wind is blowing, you can get your electrons from those sources instead.
Nuclear cars??? Cool, but a little unsafe.
Unless it's a hydrogen fuel cell car that gets its energy from a nuclear plant
If they're so profitable why do they need $20 billion a year in direct subsidies from the government?
Pass a law that cuts that off over X number of years and offer that subsidy money to "green" energy sources and you'll see a massive and nearly immediate change in their business model.
https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subsidies-a-closer-look-at-tax-breaks-and-societal-costs#:~:text=Conservative%20estimates%20put%20U.S.%20direct,total%2055%20billion%20euros%20annually.
They don't... So many times has big oil announced a quarterly profit of ~$10B, or more! Cut off the subsidies!
Unfortunately, big oil throws a LOT of money at lobbying politicians, and usually gets their way on domestic policy. I mean, people complain about military-industrial lobbying, but that is a drop in the bucket compared to what big oil, big pharma, insurance and banks throw at K Street and campaigns! I sincerely hope that changes, and soon...
Big push to have less dependence on oil produced outside the US, which has happened over the last decade or so.
Um, what? Do you have a source for the quarterly profit numbers of $10B or more? I'm looking at MPC, since that is the company described in the OP, and their annual profit has been $3.3B, 3.6, and 3.8 for the last three annual periods, going back to 2017. So the quarterly profit can't be much more than 1 billion, placing your quarterly profit number off by an order of magnitude. The 2020 Q1 loss was over 9 billion though, so at least you were kinda in the right ballpark there - in the wrong direction.
I thought, maybe you're talking about ExxonMobil, they are the biggest oil company in the US after all. I went through their 10-Ks and 10-Qs, and the last quarter that they posted a $10B profit (actually it was 9.8 but I'll round up for you) was Q1 2013. Apparently to you something happening for the last time 7 years ago means "so many times."
If there are any other oil companies reporting profits of $10B, please let me know since I'd like to invest in them. The rest are currently bleeding cash.
Sources: 10-K, 10-Q, and annual reports of XOM and MPC.
Yaikes! have you seen the margin of an iphone and a barrel (42 gallons) of oil? As an investor you won't invest in oil and gas. They are paying dividends on borrowed money for the past few years. They are not investing in mid- to long-term projects.
Nuclear is also crazy expensive.
Except for the Enterprise Value (EV) of the company includes debt + cash. So $65B currently. Not just an equity market cap of $24B....
Especially when it’s fairly simple to see that oil stocks in general right now are under-valued when looked at with anything other than a short-term lens.
It will be interesting how the DOJ Antitrust Division sees the acquisition by 7-Eleven inc. I've seen them go after less.
Based on recency, how the DOJ sees the acquisition will be determined by how much 7-11 is willing to throw at Trump's campaign...
You really think this will give 7-11 control over gas/roller dog pricing?
How much is it going to cost me to get a WaWa in Nashville?
What will this mean for MPC in the market? Big, little, or no significant changes?