Delek US Holdings just delivered one of its cleaner quarters in years, yet the stock dropped almost 10% to about US$59.75 by the close. That gap between price and performance is the real story. Q2 earnings swung back to solid profitability with basic earnings per share at US$2.76 and net income at US$169.5m, supported by strong refining and logistics results.

Coming into today the stock already had a strong 3 month run. This selloff now forces investors to ask whether the market is reacting to short term refinery cycle fears, or whether it is underestimating the quality of this quarter.

Is Delek US Holdings now priced for perfection after this sharp rebound in earnings, or already reflecting the forecast revenue and earnings declines?…