5 Bargain Stocks to Buy Now

Feb 11, 2009, 4:48 am EST | By Jamie Dlugosch, InvestorPlace Writer

Bargain #5: Tesoro Corp. (TSO)

Another big winner of late has been the oil refiners. I made Tesoro (TSO) one of my Top 10 Stocks for 2009, and shares of this oil refiner have not disappointed. TSO has gained more than 35% so far in 2009.

Like Mosaic, it’s natural to ask if shares of Tesoro are a bargain today. They are. The oil refining business depends on stable
crude prices in order to generate profits. With margins slim, there is little room for error. No wonder that record volatility in
oil prices have nearly ruined the prospects for the oil refiners. The record swings in price resulted in TSO losing most of its market
value in 2008.

This year, though, the story is different. Volatility in price is still very much a part of the crude markets, but there is much
more stability as compared to last year. We are trading in a fairly narrow range, and we have been doing so for several months. Such
a state allows refiners to operate profitably which explains why shares of TSO exploded to the upside.

And there is more room to grow–the decimation in 2008 was severe. Even if shares of TSO double from current levels, the stock would
trade for less than its 52-week highs. Investors had priced TSO as if the business were about to go bankrupt. That’s not the case
and what allows you to buy at a discount today.

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