Calumet Specialty Products Partners LP (CLMT, Financial) recently experienced a daily gain of 4.55%, yet over the past three months, the stock has suffered a loss of 9.37%. With an Earnings Per Share (EPS) of $0.52, investors are keen to understand if the stock is trading at a fair value. This article delves into a comprehensive valuation analysis to explore the intrinsic worth of Calumet Specialty Products Partners LP (CLMT).
Company Introduction
Calumet Specialty Products Partners LP is a leading independent producer of specialty hydrocarbon products in North America. With a diverse portfolio that includes solvents, waxes, and high-performance lubricating oils, Calumet operates through multiple segments, delivering quality products across various industries. The company's market cap stands at $1.20 billion, with robust sales of $4.20 billion. When compared to its GF Value of $14.67, the current stock price of $15.38 suggests a close alignment with the estimated fair value, inviting a deeper look into the company's valuation.
Summarize GF Value
The GF Value is a unique measure of a stock's intrinsic value, incorporating historical trading multiples, a GuruFocus adjustment factor based on past performance and growth, and projected business performance. The GF Value Line is a visual representation of this fair value, serving as a benchmark for investors to gauge whether a stock is overvalued or undervalued. Calumet Specialty Products Partners LP (CLMT, Financial) aligns with being fairly valued, indicating that the stock price is expected to track the company's business growth rate closely.
Financial Strength
Assessing the financial strength of a company is crucial before investing. Calumet Specialty Products Partners LP's cash-to-debt ratio of 0.01 positions it lower than 95.94% of its peers in the Oil & Gas industry, highlighting potential risks. The company's overall financial strength is rated 4 out of 10, reflecting concerns regarding its financial robustness.
Profitability and Growth
Profitability is a key indicator of a company's investment potential. Calumet Specialty Products Partners LP has maintained profitability over the past decade, with an operating margin of 6.03%, which is lower than 56.43% of companies in the Oil & Gas industry. The company's profitability rank is 4 out of 10, suggesting room for improvement. Growth is equally important, and Calumet's average annual revenue growth of 10.2% is moderate compared to its industry counterparts. However, its 3-year average EBITDA growth rate of -19.7% is concerning, ranking lower than 85.99% of its industry peers.
ROIC vs WACC
Comparing a company's Return on Invested Capital (ROIC) with its Weighted Average Cost of Capital (WACC) provides insights into its value creation efficiency. Calumet Specialty Products Partners LP's ROIC of 8.48 is below its WACC of 10.39, indicating that the company may not be generating sufficient returns on its investments.
Conclusion
Ultimately, Calumet Specialty Products Partners LP (CLMT, Financial) presents as fairly valued. Despite this, concerns about the company's financial condition and profitability cannot be overlooked. Investors should consider these factors, along with the company's growth challenges, when making investment decisions. For a detailed financial overview, Calumet Specialty Products Partners LP's 30-Year Financials are available for review.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
