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Calumet Specialty Products Partners LP Message Board

  • mike2915 mike2915 Apr 6, 2013 1:31 PM Flag

    Short Interest 3/13

    I notice that short interest is up about 30% from previous posting. Although I cannot see shorting an MLP that has a good distribution and has been increasing them for over 2 years! I guess I am not smart enough to be a short?

    Sentiment: Strong Buy

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    • If they were shorting on the EPA compliance, they were way ahead of me. More likely they were seeing the declinning Canadian Heavy to WTI and WTI to Brent spreads, along with a market looking for reasons to correct. I thought the Cyprus deal might cause European contagion and moved a considerable percentage to cash, but kept CLMT. They have a terrific risk management program and will likely report considerable hedging activities in Q1 taking advantage of great spreads in Jan and Feb. Also, everytime I start worrying about margins and get spooked out of an MLP, I end up kicking myself later. Commodities cycles change frequently, and these stocks tend to have modest corrections and zoom right back up. My guess is that we have seen the lows, although I do wish the company would report the potential cost estimate to comply with the EPA. That said, I looked for a Canadian Oil and Gas company to hedge the spread decline. I found one that develops light oil and never really got hit with the deep discounts of Canadian Heavy crude, but the share price got the snot knocked out of it along with all the other Canadian oil and gas producers. It is high risk, but hopefully, I can catch a bounce with that small cap after they report their Q1 earnings and drilling updates, and I am pretty certain that CLMT will start heading back up soon with the dividend increase and Q1 reporting as well. GL

    • its not how smart you are... insiders and underwriters (or their pals) short thru third parties before secondaries... partly to make money and partly to neutralize long positions. after the panic selling ends they close out the shorts and buy more shares. logic is that folks who bought too high for the div get screwed and say hey! i am losing some multiple of the div every day, i have to sell this, something must be wrong!!! the market is correcting, etc. first they look to see what is wrong and note the new requirement for sulphur. they use that to scare themselves even more, now they "know the reason" for all the selling and that firms up their resolution to sell and at most buy it back lower. but when the panic selling exhausts stocks like clmt go right back up, sellers miss the lows, they are too busy selling at the lows. so ask yourself: where do i want to double up my position? and buy these mlp's AFTER they do their secondaries... remember, since they distribute 90% of profits they raise money by borrowing or by issuing shares. if they borrow they are stuck with the interest costs but if they do it thru share issuance they avoid that. if you had advanced knowledge of the secondary and owned 100k shares that you could protect and you could make money all the way down and all the way back up, which method would you choose?! (well maybe You wouldn't cheat but plenty of people do). execs time secondaries for market tops and life is sweet. don't whine about the SEC not preventing this #$%$...there are two sets of rules in amerika, one for ruling elites and one for suckers. my guess: max downside on this is 31/32 in the current mkt environment so double here and double again if it goes one more level lower. the world isn't ending just yet and the baby boomers will kill for yield. i bought the panic... lucky i noticed it.

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