Every quarter this past year it is the same ole story....relative high dividend payout , stock price rises several dollars in anticipation of less than a dollar of qtly payout . Just as abruptly as the stock price rises in eager anticipation of the relatively high dividend and positive earnings news , wham Management reports declines in earning , leading to consecutive Qtly losses, the stock price plummets several dollars on unusual heavy volume , it's a virtual roller coaster of price instability . Management then report the usual full disclosure on the risks and uncertainty of the market, they offers the reasons for the decline , and talk about steps taken for the future. The relatively small group of analysts that follow this stock do not seem to ask the hard questions and appear to skirt around the real issues.
Since I am not an analysts, my views are merely those of an investor / observer who endeavors to understand the trading behavior , stability in stock price and a credible management plan followed by tangible results. Conversely , is the market for the product range going to remain in the doldrums for an unforeseeable future ? The weakened market for CLMT appears to me at present to be in a state of protracted workout , who knows if and when this company will be reignited with strong earning commensurate with dividend payouts. Until such time as there is a clear direction for this MLP , it seems that the trend for the stock price may well continue to be range bound at 20 to 25 % between the recent highs and lows. Preferably , we will not see lower lows in the near term. Good luck to the Mgmt Team as they chart course for the future!
Good post, jepscribe, and I gave you a thumbs up. I expect the rest of 2014 to play out the same way as the first two months. In the long run, I think we're in a great position. Re-read the press release/earnings report, and it's filled with all sorts of good projects that CLMT is pursuing. As long as the dividend is maintained at its current rate, I don't mind getting paid to wait. Of course, the question is whether the divy can be maintained. We've had three consecutive quarters of poor coverage. But, I think CLMT has enough resources to stave off a dividend cut until the good times return.
It's all a matter of focus , one may be engaged in multiple projects but lose the vision that created the past success. Retooling and shifting direction because of market changes are always a challenge. There are multiple risks involved in the process of reinventing , diversifying or shifting a business model. Hopefully , CLMTs management will be able to once again find a strong footing. Historically, CLMT was able to leverage up on unprecedented commodity spreads which yielded great returns , these have since narrowed. It was those spreads that fueled the rich dividend payouts ...it was a great model for success , higher dividends , higher stock price . The question now is where does Management go from here to keep that trend from reversing in the mid to long term?
I got tired of the swings so i just took my money and now get 7.5% interest in a foreign bank. Yes, that's in US dollars. That way when capital controls come shortly, I will be way a head of the sheep.
You are spot on , with money market bank preferred stocks paying anywhere from 6.25 to 7.3 % who needs the inherent risks associated with CLMT unpredictable earnings and operating performance. The main thing one must be mindful of with the bank preferreds are sensitivity to interest rates and predictable earnings stream.
Perhaps the lure of CLMTs rich 9% + dividend and whatever else they can glean by owner / punters timing the market with covered put or call options , all contribute to a wild ride in share pricing. One must keep in mind the old street saying , pigs go to market , hogs get slaughtered. When you look to double digit returns on a stock like CLMT , expect the unexpected .
Agreed! The conference call was especially disappointing in that no one mentioned dividend coverage rates, blogger estimates range from 30 to 9%. I still like this company, but this is the fourth or fifth quarter they have missed estimates, consequently I am out for now but will look for an opportunity when they show some improvement.
Well said. I wonder what impact Middle East base oils is having on CLMT. I also wonder if they will show they can integrate all of the various acquisitions/product mixes effectively. Speaking from experience from a management level, these can be challenging and take years.