PBF

PBF Energy ($PBF) Insiders Continue Massive Buying Spree Despite 70% Stock Collapse Over 10 Months

04/11/2025 20:28

PBF Energy ($PBF) has seen its stock price plummet by approximately 70% over the past 10 months, yet its major stakeholder, Control Empresarial de Capitales SA de CV, has consistently made substantial share purchases, drawing attention from Wall Street. The Mexico-based investment firm has purchased PBF shares almost weekly from June 2024 through April 2025, spending tens to hundreds of millions of dollars. What's particularly noteworthy is that these purchases continued throughout a severe price decline, from around $45 in June 2024 to below $15 in early April 2025. As recently as early April, they were still buying at prices below $14 per share. PBF Energy, an independent petroleum refiner with several refineries across the United States, has faced serious operational and financial challenges recently. A fire at its Martinez refinery in California on February 1, 2025, dealt a significant blow to the company's operational capabilities. Repair costs are estimated at approximately $30 million, and some damaged units are not expected to restart until the fourth quarter of 2025. Beyond operational issues, PBF has struggled with industry-wide declining refining margins and weak fuel demand. The company reported larger-than-expected losses in quarterly results announced in August and October 2024, with an adjusted loss of $1.50 per share in Q3 2024 compared to earnings of $6.61 per share in the same period the previous year. Furthermore, President Donald Trump's tariff policies have added pressure on refiners like PBF. Tariffs on heavier crude from Canada and Mexico have increased raw material costs for U.S. refineries. Although some of these tariffs were temporarily paused, industry experts expect these policies to further squeeze refining margins in the long term. Despite these headwinds, Control Empresarial de Capitales has purchased PBF shares almost every week for approximately 10 months. This pattern continued in their most recent transactions as of April 10, 2025. Such persistent buying suggests strong conviction in the company's long-term value. "It's highly unusual to see insider buying this consistent and substantial, especially during such a severe price decline," says Jonathan Weinstein, an energy sector analyst. "This strongly indicates insiders believe the current stock price significantly undervalues the company's intrinsic worth." Indeed, PBF's valuation metrics suggest considerable undervaluation. The price-to-book ratio stands at just 0.31, while the enterprise value-to-EBITDA ratio is 2.74. This implies the company's market value is only about one-third of its asset value. However, not all analysts are optimistic. BMO Capital Markets downgraded PBF to "market perform" in October and lowered its price target from $42 to $35. More recently, several brokerages have cut price targets for U.S. refiners, expressing concerns about margin outlook for 2025. Finally, it's worth noting that PBF is taking steps to address its operational issues. The company has restarted some units at the Martinez refinery and is adjusting throughput at other facilities to compensate for lost production. It also aims to cut $200 million in costs in 2025. Whether $PBF's stock has bottomed out or has further to fall remains uncertain. What is clear, however, is that insiders are convinced the current price represents value worth buying. The consistent insider buying pattern sends a strong signal to long-term investors, though they should still carefully consider the significant operational and market challenges facing the company.

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