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About Me
- joewxman
- a meteorologist with a knack for trading and investing in MLPS! I also like horse racing, enjoy cigars and a good port wine.
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5 comments:
What are people's thoughts regarding CLMT? There's no doubt that its a tough operating environment and the cost over runs definitely hurt, but with other refiners leaving the specialty product space and the increase in refining capacity, I don't see how this isn't attractive at $13, especially considering the replacement value of the assets. It also seems like the expansion is now fully paid for and the company is being smart in taking proactive steps to weather the storm ie decreasing inventories and increasing hedges. Is this a possible acquisition target at this level? Thanks.
i began building a position in Calumet after earnings today. My fear was some sort of indication of another distribution cut down the road. Since they said nothing about that the question becomes about oil and a when (or if) the price ever drops again. Refiners are getting squeezed in here and if oil can sell off and take the pressure off...then calumet can rally from here.
Same logic on refiners could also apply to Valero (VLO)which has been killed in this enviornment.
I don't think oil is going down anytime soon. The supply/demand dynamic is just too tight. CLMT seems like a very risky play...Especially considering their Q2 numbers are already shaping up to be worse than Q1 numbers given oil has continued to move up since 3/31/08.
I purchased CLMT just after the distribution cut last month in the low $14's (high $13's considering the ex-distr.). I did so for the return and as a hedge for my E&P MLP's. I bought some TSO for a hedge also. I thought the earnings announcement and today's conference call were acceptable. Given what we have all learned in the last few weeks, no one should have been expecting much. It was my first time listening to management speak. They are not good speakers, but they appear to know their business well. Their execution and predictions of late have been terrible, and the fact that hedges haven't been sufficient until very recently are inexcuseable for an MLP. They have paid the price literally, and it has given all of us recent unitholders a very attractive entry point. I'm doubtful on a takeover since I'm not sure who would want to be in this specialty business, or for that matter, the refinery business, at the moment.
I don't think CLMT belongs in an MLP structure. It's operating model just isn't MLP-like.
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