Calumet Specialty Products Partners, L.P (NASDAQ:CLMT)

CAPS Rating: 4 out of 5

The Company is a producer of hydrocarbon products in North America. Its business is organized into two segments: specialty products and fuel products.

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Member Avatar TMFDeej (99.46) Submitted: 4/8/2014 3:39:26 PM : Outperform Start Price: $26.70 CLMT Score: +2.78

With a yield of over 10% Calumet is being priced as though a dividend cut is a foregone conclusion. I'm not so sure. I think that the company has ample liquidity to cover its current distribution now. With new projects that the company spent $500 million on coming on-line over the next several years, a likely improvement in the asphalt market after a rough winter tore apart the roads / a rebounding construction market and significantly less downtime than the massive amount that it experienced as a result of turnaround maintenance last year its distribution ration coverage should improve significantly in the future.

Having said all of this, be forewarned that the company may issue new shares at some point in 2014. It's difficult to say whether such an event is already priced into the company's stock.

Jason

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Member Avatar dpid (88.34) Submitted: 3/6/2014 1:25:53 PM : Underperform Start Price: $25.39 CLMT Score: -9.78

Foreseeing a cut in distributions soon, will will impact share price. Would love to pick this up in upper teens for LT holding.

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Member Avatar chris293 (87.15) Submitted: 1/17/2014 4:01:52 PM : Outperform Start Price: $29.04 CLMT Score: -5.85

This company has its ups and downs, cutting its dividend and paying down the debt should work with the U.S. becoming energy independent for positive growth in the future.

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Member Avatar ir4getful (86.83) Submitted: 12/19/2013 6:57:34 PM : Outperform Start Price: $25.16 CLMT Score: +6.56

Good value at this price. Good track recored of growth and sustainable high yield. Current value result of taper fears (unfounded for now) and refiing spreads. They have good access to lower priced oil (Bakken), efficient operations, specialty products with more stable margins, some interesting growth projects underway, and shouldn't priced as a pure-play refiner. Well managed and shareholder friendly.

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Member Avatar exoblight (< 20) Submitted: 12/18/2013 12:28:02 PM : Outperform Start Price: $25.20 CLMT Score: +5.18

Dividend play

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Member Avatar Rloanie (< 20) Submitted: 8/27/2013 10:00:59 PM : Outperform Start Price: $29.22 CLMT Score: -19.69

This is a good company and I purchased some shares when it dropped under $29 a couple of weeks ago. However, there are some particular issues with the company that you have to take into account if you are considering investing in it.

First, the company is structured under a master limited partnership, which means that they need to keep giving the dividend or the stock will crash. This is all good while cash flow is there, but might not be the best when cash flow is tight. When that happens and the company cash on hand is depleted then management will have to decide whether to take on more debt {CLMT is already more leveraged than other companies in the sector that do not have the MLP structure}

Second, remember when I said that the MLP structure is great when you have stable cash flow like for example pipelines under long term contracts.... Well refining and cash flow stability do not really mix. In refining, you make money by converting crude into gas and distillates. In the case of CLMT, there is an emphasis in the later but at the end of the day they also produce a lot of fuel. The margin that refiners make in this process is called the "crack spread" as in cracking the crude into pieces. That number has been all over the place during the last year.

Third, there are some specific headwinds affecting CLMT's business. Its nine refineries are small and had the benefit of having access to cheaper domestic crude called West Texas Intermediate (WTI) as well as other lower grades. In the last six months, WTI's cheapness has been disapearing which takes away some of its pricing advantage. In additon, you have the pesky government putting minimum ethanol use requirements, which force the company to have to buy credits to meet its quota and the whole cost structure becomes tighter.

On the good news side of the equation, the company is aggresively acquiring refineries, and other related businesses. They bought "Royal Purple" and "Southoil" brand of lubricants and I read somewhere that they are trying to get Royal Purple into Walmart.

The bullish bet here is clear. You are betting that the headwinds can be overcomed and that the company can go back to making enough cash flow to keep the dividend at the same level and continue growing it. The dividend is higher than other MLPs because there is concern about it being sustainable. I believe that it is a good gamble that even if the turnaround is only partial on the cost structure that the continuing acquisitions will support it.

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Member Avatar beetom41 (< 20) Submitted: 7/26/2013 5:06:34 PM : Outperform Start Price: $31.37 CLMT Score: -22.15

new refinery coming on line 2015

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Member Avatar CardinalRam (38.85) Submitted: 7/18/2013 11:38:44 AM : Outperform Start Price: $31.71 CLMT Score: -23.14

I don't try to out-perform the S&P - I just want to grow my equity and right now good dividend producing stocks are a good, safe way of doing that.

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Member Avatar theo20 (< 20) Submitted: 4/12/2013 11:46:36 AM : Outperform Start Price: $33.49 CLMT Score: -35.29

dividend

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Member Avatar jamesacoffman (< 20) Submitted: 2/12/2013 9:16:24 PM : Outperform Start Price: $33.57 CLMT Score: -40.12

These guys are able to use some of the worst crude to make specialty products. Low input cost and high output prices. Brakken cracken optimal situation. Huge growth potential.

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Member Avatar BLyda97112 (31.73) Submitted: 2/10/2013 2:42:47 AM : Outperform Start Price: $32.96 CLMT Score: -39.08

Calumet delivers. Great products, solid management, healthy dividends and the occasional acquisition makes them a winner in my book.

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Member Avatar PenchyOne (63.55) Submitted: 2/6/2013 9:29:42 AM : Outperform Start Price: $29.45 CLMT Score: -31.60

High dividend.

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Member Avatar JustEconist (< 20) Submitted: 1/19/2013 12:44:03 PM : Outperform Start Price: $29.36 CLMT Score: -31.61

Yes. it is a divident stock and low P/E

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Member Avatar loangolfer (< 20) Submitted: 1/11/2013 9:33:34 AM : Outperform Start Price: $28.63 CLMT Score: -30.41

Travis Johnson stock gumshoe

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Member Avatar ekeith12 (< 20) Submitted: 12/17/2012 7:49:34 AM : Outperform Start Price: $27.59 CLMT Score: -30.75

Lower feed stocks' costs will allow greater profit margins on products produced.

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Member Avatar crazyeconprof (< 20) Submitted: 12/12/2012 5:44:58 PM : Outperform Start Price: $27.53 CLMT Score: -29.65

A solid niche, a big divid., and strong growth.

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Member Avatar supaflylob (< 20) Submitted: 10/16/2012 7:56:00 PM : Outperform Start Price: $27.04 CLMT Score: -25.88

fav

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Member Avatar AdamGalas (46.79) Submitted: 6/2/2012 7:23:26 PM : Outperform Start Price: $18.13 CLMT Score: +7.09

Specialized oil refiner that has proven it can survive a financial crisis and maintain dividends.

Currently over 10% yield means that this one is a great place to park long term money.

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Member Avatar kmaines (< 20) Submitted: 3/3/2012 9:13:26 AM : Outperform Start Price: $20.42 CLMT Score: -0.77

strong mgmt, well integrated with other companies owned by principals.

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Member Avatar fooluser17 (37.58) Submitted: 12/13/2011 12:20:46 PM : Outperform Start Price: $15.79 CLMT Score: +25.48

Will probably add to real portfolio due to solid dividend payout and dividend growth over the years. A little concerned about the high PEG (whats up with that?) and low cash on hand per share with a significant amount of debt. However, they're bringing in good money and lots of profit.

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