Calumet: A Compelling Energy Transition Turnaround

Tyson Halsey, CFA
2.88K Followers

Summary

  • Calumet Inc. is transitioning from an overleveraged oil refiner to a leading producer of Sustainable Airline Fuel (SAF), with potential for exceptional returns.
  • The company converted from an MLP to a C-Corp to attract institutional investors and is restructuring its debt to improve financial stability.
  • A prospective DOE loan and reduced capital expenditures could significantly enhance cash flow, aiding in debt reduction and boosting SAF production capacity.
  • If successful, Calumet could achieve a market cap of $10 billion by 2027, driven by high growth in the SAF market and strategic debt management.

Fall Cornfield with Ethanol Biorefinery in the Background

BanksPhotos

Buying a value or distressed stock before it transforms into a powerful growth stock is a great way for an investor to generate exceptional returns. Calumet’s value to growth transition offers this type of rare investment return opportunity. Calumet, Inc. (

This article was written by

2.88K Followers
Tyson Halsey, CFA, founded Income Growth Advisors, LLC, a South Carolina based Registered Investment Advisor. Through his career, Halsey has researched and invested in technology, energy, quantitative strategies, been a shareholder activist on behalf of shareholder rights, and invested in Master Limited Partnerships (MLPs) since 2000. . Halsey has appeared in major media including The Wall Street Journal, Barron's, Charleston Post and Courier, South Carolina Public Radio and CNBC. Halsey won the USA Today CNBC Investment Challenge in 1992 in the options division.Halsey formed Optima Process Systems, Inc. in 2018 and used economic cost modelling for ESG solutions. We analyzed heavy oil upgrading in South America, bunker fuel desulfurization for IMO 2020, and biofuel and biomass processing. Halsey has moderated panels on the energy transition "ESG 2.0" for the Ivy Family Office Network (IVYFON).

Analyst’s Disclosure:I/we have a beneficial long position in the shares of CLMT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I own Calumet stock and Calumet call options

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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