PBF

As Refiner PBF Energy($PBF) Shares Plunge 70%, Insider Maintains $400 Million Buying Spree Over 10 Months

04/16/2025 22:29

As PBF Energy's ($PBF) stock has plummeted nearly 70% over the past ten months, a remarkable pattern has emerged: one significant insider has consistently made massive purchases, capturing the attention of energy market observers. PBF Energy shares began trading around $44 in June 2024 and have since fallen to approximately $14 by mid-April 2025, representing a nearly 70% decline in value over a 10-month period. This downward trajectory accelerated after July last year, driven by shrinking refining margins, weakening demand, and exacerbated by the February 2025 fire at the company's Martinez refinery. Against this backdrop of share price erosion, a legal entity called Control Empresarial de Capitales SA de CV (hereafter 'Control') has steadily purchased PBF Energy shares almost weekly from June 2024 through April 2025. According to insider trading records, Control has made approximately 90 separate purchases over the past 10 months, with total investments approaching $400 million. Particularly noteworthy is Control's buying behavior. When shares traded in the $44 range in June 2024, Control purchased hundreds of thousands of shares at an average price of around $45 per share. As the stock declined to the $30s, the purchases continued unabated. When shares further dropped to the $20s in February 2025, Control maintained its buying volume. Even in April, as the stock fell to the $14 range, Control added another 15,000 shares. This consistent buying pattern suggests strong conviction in PBF Energy's long-term value proposition. The tendency to increase purchases during significant price declines indicates a belief that the current share price substantially undervalues the company's intrinsic worth. PBF Energy ranks as the fifth-largest independent refiner in the United States, operating six refineries with approximately 1 million barrels per day of refining capacity. However, the company has recently faced substantial challenges. In its Q4 2024 earnings release on February 13, 2025, PBF reported a loss of $2.82 per share, exceeding analysts' already pessimistic projections. On the same day as the earnings announcement, PBF Energy acknowledged significant damage from a February 1, 2025 fire at its Martinez refinery. By early March, the company estimated repair costs at approximately $30 million, with some damaged units not expected to restart until Q4 2025. Another fire occurred at the same refinery on April 3, though it was quickly extinguished. Broader challenges in the refining industry have compounded PBF Energy's difficulties. Weak fuel demand and declining refining margins have prompted several investment banks to lower their price targets for PBF Energy. BMO Capital Markets reduced its target from $42 to $35 in October, while Bank of America issued further downgrades in April. Additionally, President Donald Trump's February 2025 announcement of tariffs on Canada, Mexico, and China created further pressure on U.S. refiners. Canada and Mexico represent critical sources of heavy crude oil that U.S. refiners depend upon. Although a 30-day tariff pause was subsequently announced, uncertainty remains. Furthermore, the U.S. government's decision to revoke Chevron's license for Venezuelan crude exports is expected to negatively impact Gulf Coast refiners like PBF Energy. According to TD Cowen, PBF Energy is among the companies significantly dependent on Venezuelan crude imports. Despite these challenges, Control's persistent buying deserves attention. Insiders typically possess more information about a company's situation and long-term prospects than outside investors. Continuing large-scale purchases despite several quarters of losses and stock depreciation signals Control's strong belief in the company's recovery potential. PBF Energy began restarting some units at the Martinez refinery in early April, and though the fire-damaged catalytic gas plant and certain other units remain offline, phased recovery is underway. The company has also targeted approximately $200 million in cost reductions for 2025. Analysts anticipate refining margins will recover in 2025 and 2026, potentially improving PBF Energy's profitability. Some also suggest that the current $14 share price fails to adequately reflect the company's asset value. In conclusion, PBF Energy's insider trading pattern suggests the market may be overly pessimistic about the company's current challenges. Control's substantial purchases demonstrate confidence in the company's long-term value, potentially indicating an investment opportunity at current price levels. However, investors should remain mindful of structural challenges in the refining industry and company-specific operational risks.

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