3 Top Stocks to Be Thankful for This Year

On Nov 25, 2021

What are you thankful for this holiday weekend? Taking a look at the broader picture of the US economy, there’s a lot that’s going right. The jobs situation is improving, wages are up, and consumers are flush with cash. While inflation is high, and remains a problem, we do have the ingredients for a good year ahead.

The stock markets have done their part, too. We should all be grateful for the S&P 500’s record highs and a 25% gain this year.

So let’s show our appreciation – for strong investment returns. Wall Street’s analysts have been busy finding the stocks that will make you thankful you got into the market, and we’ve used the TipRanks data to get a closer look at three of them. Each has a Strong Buy rating from the analyst community, and stands to notch more gains on top of its already impressive growth.

Calumet Specialty Products (CLMT)

We’ll start in the industrial sector, where Calumet is a producer of specialty products. The company’s product list includes aliphatic solvents, naphthenic oils, and paraffin waxes. The company has been in business for over a century, and has 10 production facilities putting out more than 3,400 unique end products. Calumet boasts over 2,700 business customers in 90 countries around the world.

This month, Calumet has itself had enough to be thankful for, in the form of some good news for the company. Just last week, the company announced several new strategic partnerships that will enhance its renewable diesel fuel business. These included the investment, as convertible debt, of $300 million by Oaktree into Calumet’s subsidiary, Montana Renewables (MRL), and the carve out of MRL as wholly-owned pure-play subsidiary in the renewable fuel market.

Earlier this month, on the 5th, Calumet released its 3Q21 earnings. The top line revenue, of $874.9 million, was the highest in two years, and up 54% year-over-year. EPS did even better. Earnings had been negative for the past seven quarters, but has turned positive and came in at 64 cents profit per share. Impressively, Calumet’s stock is up 380% this year.

Analyst Roger Read, covering the stock for Wells Fargo, sees the moves on the renewable diesel front as key factors for Calumet going forward. He believes the spin-off of MRL will give the company greater agility in the field, while the investment from Oaktree brings needed capital.

“The cash infusion from an outside investor helps validate the Renewable Diesel conversion project while maintaining the majority of the project’s value for CLMT. Longer term, we see CLMT’s willingness to separate renewable diesel from the rest of CLMT as supportive of our SOTP valuation approach and positive outlook,” Read noted.

To this end, Read rates CLMT an Overweight (i.e. Buy) and his $27 price target implies ~80% upside for the year ahead. (To watch Read’s track record, click here)

“A proactive management team remains focused on establishing the Renewable Diesel ops… Some supply-chain…