Crossroads Capital Investment Sold Its Position in Calumet (CLMT)

Crossroads Capital LLC, an investment management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The Crossroads Capital Investment Partners, LP fell 7.6% net of all fees and expenses in the first quarter of 2025. The fund has compounded at 13.3% and 16.0%, respectively, since inception, and over the last five years outperformed its most suitable benchmarks. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Crossroads Capital highlighted stocks such as Calumet, Inc. (NASDAQ:CLMT). Calumet, Inc. (NASDAQ:CLMT) manufactures and formulates a diversified slate of specialty branded products and renewable fuels. The one-month return of Calumet, Inc. (NASDAQ:CLMT) was 9.09%, and its shares lost 14.94% of their value over the last 52 weeks.  On June 6, 2025, Calumet, Inc. (NASDAQ:CLMT) stock closed at $13.44 per share, with a market capitalization of $1.164 billion.

Crossroads Capital stated the following regarding Calumet, Inc. (NASDAQ:CLMT) in its Q1 2025 investor letter:

Calumet, Inc. (NASDAQ:CLMT): In our last letter, we issued what was essentially an ultimatum. For reference we wrote, “Calumet’s current $15 stock price is nothing short of lunacy as long as management can competently execute the rest of the playbook and, in doing so, rehabilitate the reputation of a C-suite and BoD suffering from several unforced errors and related credibility issues. The 64k dollar question at this point is will the center hold?”

To that last question, the answer was no – and we exited the equity early in the quarter in the low 20s, though we still maintain some exposure via call options. On paper, we saw a clear line of sight to well over $30/share in near-term intrinsic value, but realizing that upside was always going to hinge on management execution – not just in operations, but in clearly communicating a transparent and compelling thesis to the investment community. Post-DOE loan, even after direct coaching from shareholders, management still failed to articulate both the thesis and the underlying facts that would have made it obvious normalized earnings were well above where the street had penciled them in.

As just one example of our exasperation, management’s inability to simply and credibly detail that contracted offtake agreements for SAF are at a $1.50–$2/gal premium to renewable diesel – like peers at Darling Ingredients – remains baffling…” (Click here to read the full text)

An aerial view of an offshore oil platform against the backdrop of the open sea.

Calumet, Inc. (NASDAQ:CLMT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Calumet, Inc. (NASDAQ:CLMT) at the end of the first quarter, which was 21 in the previous quarter. While we acknowledge the potential of Calumet, Inc. (NASDAQ:CLMT) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Calumet, Inc. (NASDAQ:CLMT) and shared Crossroads Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.