Top Stock to Buy #1 – Calumet Specialty Products Partners LP (CLMT)
Calumet Specialty Products Partners LP (NASDAQ:CLMT), a leading producer of crude oil-based specialty lubricating oils, solvents and waxes, was first highlighted as a Trade of the Day on Feb. 19 at $36.72.
The company had exceeded Q4 earnings estimates, and the quarterly distribution per unit was increased to $0.65. First-quarter 2013 results are scheduled to be reported on May 8. In advance of that release, the company announced another increase in its quarterly cash distribution to $0.68 per unit, which at current prices, offers a yield of 7.2%.
S&P said, “Recent refinery acquisitions should help the partnership access discounted crudes coming from the Mid-Continent and Canada.” And Zacks upgraded the stock to a “strong buy” on March 13, saying the LP “boasts an impressive long-term expected earnings growth rate of 25.32%.”
CLMT broke from a cup-and-handle formation on Feb. 8, followed by a confirming breakaway gap, and ran to a 52-week high of $40.25 in early March. On March 26, the company offered 5.25 million shares priced at $37.50, a 4.1% discount to the prior closing price, and the offering sold out.
In mid-April, at about $37, the stock broke from a triangle, which was accompanied by a MACD buy signal. With a price objective of $42 and a distribution rate at over 7%, CLMT could provide total annual returns of close to 20%.