This one is a true Peter Lynch, One Up on Wall Street-style thesis. The general idea is that regular people have an edge over professionals when they use their everyday observations. The big-deal financial pro living in Manhattan will not have the same everyday observations as you.In his book, Lynch gives an example of a man who earned a lot of money investing in Tambrands because he noticed that their local factory kept expanding. Tambrands was founded in the 1930s and later became known as Tampax. I believe the dude was literally out on his boat in the 1930s or ’40s and simply observed repeated construction expanding the size of the factory. Talk about a seemingly mundane observation leading to a lot of money.I doubt this observation will be the moonshot that the guy had from investing in Tampax.But…There are Sinclair gas stations everywhere in the PNW now. I never saw a single one growing up; in the last five years or so, suddenly the world is full of those green dinosaurs. An interesting fact about living out in the boondocks: sometimes things look like trash, and sometimes they are broken. One gas station that I go to that used to be a Chevron and is now a Sinclair and got a complete facelift when Sinclair moved in. Now it doesn’t feel like a place where someone is going to try to sell you meth in the parking lot. The gas pumps used to randomly not work some of the time, or, better yet, the gas station would be out of regular octane gasoline. None of these things have been a problem since the station switched over to Sinclair.I mentioned dinosaurs a second ago, it’s a whole thing with Sinclair. The additive in their gasoline that makes it Top Tier is called DINOCARE. Their logo is a dinosaur, they have green dinosaur statues at every gas station, and, you guessed it, their ticker symbol is DINO. Like I said, it’s a whole thing with them. I guess it originates from the early 1900s, when Sinclair used the dinosaur thing as a gimmick, a play on the term “fossil fuels.” In the 100 or so years since, apparently, they have never let go of that marketing ploy. Going back to my last point, if these guys are so fixated on branding, I don’t think they want you pulling up to a gas station where the dinosaur statue is missing its head and the rest of it has been spray-painted. To me, the Sinclair gas stations always seem to be in at least above-average condition compared to others.I know a lot of people who work at oil refineries at the blue-collar level. I know a pipefitter, two operators, and half a dozen other contractors with very niche jobs. Refineries are very interesting and highly specialized places. In my state, we have a BP refinery, a Phillips 66 refinery, a Marathon refinery, and the Sinclair refinery. If you visually see them, BP looks by far the best; security is everywhere, and everything has a fresh coat of paint on it. Meanwhile, Phillips 66 looks like a giant rust heap that is lucky to be alive. This is superficial, but I take it as a sign of pride of ownership. If everything looks like hell from the road driving by, what else might be wrong?This is largely confirmed by the people I know who work in these places. If I had to rank-order them, I hear BP > Sinclair > Marathon > Phillips 66. This is in terms of which is the better employer and which company maintains its plants correctly. Don’t take my word for it:Refinery Reddit ThreadThat’s a Reddit thread of guys who work at all four refineries comparing notes. Everyone agrees Phillips 66 is total trash, FYI, in case you own their stock. HF Sinclair bought a new refinery around 2022, and that’s why their gas stations have popped up so aggressively. There is also good reason to believe that they are a sound operator based on nontraditional channels of information. But is this gas station strategy effective? Why isn’t everyone else doing it? At one point, that same refinery was owned by Shell, yet I don’t remember nearly as aggressive an expansion when Shell moved in.The advantage of having a large footprint of branded gas stations is that it locks in distribution for the refinery’s product. The other point is: if this strategy is so effective, why isn’t everybody doing it? To an extent, they are. Chevron and Shell do have wide networks of their own gas stations. But they are also much larger corporations. Chevron’s market value is $359 billion, Valero sits at $72 billion, and Sinclair is valued at $12 billion as of this writing. The likes of Chevron, Shell, Marathon, retail brand name Arco, and Valero already have thousands of gas stations apiece, whereas Sinclair is sitting at a mere 1,750.The interesting part about the gas station world is that exceedingly few are owned by the corporation whose brand they display. They typically lock into multiyear agreements with a branded supplier. I’ve answered part of the question: Sinclair’s aggressive expansion followed the purchase of an oil refinery. In my opinion, there is an increase in quality that is visible to the consumer, it helps to have a working gas station. But how are they able to steal gas stations away from those they have been contracting with? Remember, gas stations matter because they are built-in distribution, and distribution equals money.The biggest structural reason Sinclair can expand aggressively is that it’s no longer a standalone company. HollyFrontier acquired Sinclair’s branded marketing business, two Rocky Mountain refineries, and its renewable diesel operation in a major deal, then rebranded itself as HF Sinclair. That gives the Sinclair brand the financial muscle of a larger, publicly traded refiner behind it, with far more capital to deploy than it had as a private company.All of this lets Sinclair move in. If you are an independent gas station owner, what would you be looking for? A consistent supply of gasoline, help with maintenance and remodeling, and a brand that brings in customers. Well, Sinclair, it would seem, provides all of those. I would put a lid on the importance of the brand, however. I think convenience drives a lot of use with people. In my area, though, I have some gas stations that I avoid and others I prefer. I imagine that this isn’t entirely unique to me, but it is not some overarching rule where everyone behaves that way.HF Sinclair’s refineries in Wyoming, Utah, New Mexico, Kansas, Oklahoma, and Washington give them a natural cost advantage in the surrounding regions. Shorter pipeline and transport hauls mean lower delivered fuel costs, which they can pass on to dealers as a better wholesale price than a major brand whose nearest refinery might be much farther away. A dealer in near a refinery may get genuinely cheaper fuel from Sinclair than from a competitor, not because the competitor is being obstinate, but because the physics of moving refined product favor Sinclair’s footprint in these specific areas.Let’s frame it this way, the average gas station retails about 900,000 gallons of gasoline a year. If Sinclair with a nearby refinery was able to offer 10 cents less per gallon that would equal $90,000 more a year for the gas station. That could certainly pull people to Sinclair.This might all sound underwhelming, quality refining operations, a better experience for customers at the pump, and aggressive expansion. But in my experience boring often equals money, if it wasn’t boring then everyone would be paying attention to it. Now that the Peter Lynch, everyday-person-observation part of this is over, let’s look at the charts and financial statements.S&P 500 vs. Sinclair over various time periods:Remember that Sinclair fundamentally changed a few years back when it was bought out by HollyFrontier, which kept Sinclair’s branding, and the company became HF Sinclair. I’ve just been dropping the HF out of laziness.In terms of financials there aren’t any problems here. Feel free to check the 10-K yourself.2025 10-KI know I have been focusing a lot on the ever-interesting gas station/oil refinery quality angle. That is the Peter Lynch-inspired approach, but there is more information to be had as well. Sinclair also has 4,100 miles of pipeline, 17 terminals, and eight loading-rack facilities. Interestingly, they produce “food-grade lubricants” in some places, think of the oils and greases that might be in food. That’s right, apparently, your meal might start in an oil refinery. Sinclair appears to have a strong footprint in terms of refineries in the Midwest, Southwest, and on the West Coast, but essentially nothing east of the Mississippi. Its S&P credit rating is BBB-, if that is something that matters to you.I don’t know if that is too small to read or not; on my screen, it isn’t. But as far as Sinclair’s balance sheet, income statement, and statement of cash flows go, I don’t see anything concerning. Which is boring, because I like to find a smoking gun. All my good investments are boring… For a company with a market cap of $12 billion, having $9 billion in equity is quite nice. I’m not as interested in the income statement for an energy company because…In the short term, their revenue is tied closely to the price of oil, which is something out of their control. Was it actually a bad year for the company, or was it a bad year for the price of oil? I don’t think the income statement gives you an answer as to who the culprit is.Cash flow statements give far more usable information here: responsible capex, not taking on huge amounts of debt or issuing stock, and maintaining some level of buyback. The company looks fine to me, and it seems more like a bad year for the price of oil than the company shitting the bed. The cash flow statement looks fine to me, and I put the relevant charts up above.Scale Economies — Unit costs decline as volume grows, so the largest player can underprice rivals (e.g., Netflix spreading content costs across subscribers).Nope.Network Economies — The product becomes more valuable as more people use it, making it hard for latecomers to catch up (e.g., LinkedIn, Facebook).Nope.Counter-Positioning — A newcomer adopts a superior business model that incumbents can’t copy without damaging their existing business (e.g., Vanguard’s index funds vs. active managers).I don’t think so, I think energy companies all have the same playbook and it comes down to execution and returning value to shareholders.Switching Costs — Customers face real losses (money, time, effort, risk) if they move to a competitor (e.g., enterprise software like SAP).Zero switching cost for customers who can just drive somewhere else.Branding — Long-built associations let a company charge more for an objectively similar product (e.g., Tiffany, Hermès).Perhaps against the unbranded gas stations that sell meth pipes, but not against Shell and Chevron. However, I associate Sinclair with working gas pumps, which is, for some reason, a common struggle where I live.Cornered Resource — Preferential access to a valuable asset others can’t get: patents, unique talent, mineral rights (e.g., Pixar’s creative “Brain Trust”).I do consider oil refineries and gas stations to be cornered resources. Fun fact: no new oil refinery has been built in the United States since the 1970s. Environmental activists would shit a chicken if someone tried to build one now and would attack it with any environmental lawsuit they could use to tie it up in court. It’s the same tactic they use with pipelines. Thus, ironically, they increase the value of the assets energy companies own. It doesn’t give Sinclair an edge over all the other refiners, but it does mean Sinclair is dug in and isn’t going anywhere.I view gas stations the same way. They aren’t so easy to build. There are giant tanks underground holding gasoline that can’t leak and require maintenance. Building a new gas station is expensive, and placing them has a strategy to it as well. It doesn’t make sense to have five gas stations clustered together outside of a densely populated area, if it even makes sense there. The money you would expect to make wouldn’t justify the construction cost. If an energy company can win over a gas station, it has a dug-in footprint and guaranteed distribution. Much like with refineries, it makes a company hard to push out.Process Power — Deeply embedded organizational processes that competitors can’t replicate quickly even if they understand them (e.g., Toyota’s production system).Nope. I have to apologize for being such a loser. Here, the world is going crazy over what might happen with AI and SpaceX, and I’m over here obsessing about what is actually going on with gas stations and oil refineries. That being said, I am up 33% since buying into DINO. I do find that boring often equals money, and cool equals massive, unexpected losses. I’m not sure how much of that has to do with speculation around the war with Iran. I have stock in Sinclair, and I plan on holding it long-term.I also figured I would give a half-time report:Why not be transparent about the quality of what I do? At this point, y’all know for sure that I don’t touch bubble tech stocks. I’m not sure if this will hold up or if I’ll beat the S&P 500 through the end of the year. The only stocks I’m holding right now that are up are DINO and COF. T, UBER, SHEL, M, and LOPE are currently dragging, but they are stocks that I am very optimistic about long-term. When people talk about it being hard to beat the S&P 500, I laugh because that only makes sense with an obsessive short-term focus, where one intends to beat it every single year rather than over a market cycle.Next I plan to write about Grand Canyon Education (LOPE).Okay, bye bye now.My Portfolio:T, COF, UBER, SHEL, M, DINO, LOPE*I think it is worth stating that just because I hold a stock doesn’t mean I think it’s a good idea to buy it right now.Subscribe now*Disclaimer*You can and will lose money in the stock market. You can lose all of your money. I can and will be wrong. I have been wrong in the past. I have lost money in the past. Investing in stocks is risky and should never be considered safe. Invest at your own risk.