Top 5 Chemical Stocks To Watch Right Now

Top 5 Chemical Stocks To Watch Right Now: PetroLogistics LP (PDH)

PetroLogistics LP owns and operates propane dehydrogenation (PDH) facility. The Company is located in the vicinity of the Houston Ship Channel. As of April 23, 2012, the Company had an annual production capacity of approximately 1.45 billion pounds of propylene. Its PDH facility uses a CATOFIN dehydrogenation technology pursuant to a fully-paid license from CB&I Lummus. It derives its sales from three different sources: propylene sales, hydrogen sales, and mixed stream of butane and butylenes (C4 mix stream) and heavier hydrocarbons (C5+ stream) sales.

Contracted Propylene Sales

The Company has propylene sales contracts with The Dow Chemical Company (Dow), Total Petrochemicals USA, Inc. (Total), and INEOS Olefins and Polymers USA (INEOS), each of which use the propylene it supplies in the acrylic acid, polypropylene and acrylonitrile plants. Effective January 1, 2012, it added BASF Corporation (BASF) and LyondellBasell Industries N.V. (LyondellBa sell) as additional contracted customers. It delivers propylene to these customers through its integrated pipeline system, which connects its facility to the Dow and Total plants and the LyondellBasell system, and through interconnected third-party pipelines, which connect its facility to INEOS and BASF and to other potential propylene customers.

Spot-Market Propylene Sales

Through the Companys integrated pipeline system, the Company accesses other consumers of propylene, which it is able to supply on a spot basis with its excess production capacity. It manages its contract and spot portfolio.

Hydrogen Gas Sales

As part of the PDH process, the Company produces commercial quantities of hydrogen. Hydrogen is consumed in refinery processes, including fuel desulphurization.

C4 Mix/C5+ Streams Sales

The Company produces commercial quantities of C4 mix/C5+ streams. It sells the C4 mix ! stream to speci alty chemical consumers or refiners and these customers tran! sport the purchased volumes from its facility by truck. The C5+ stream, which is heavy in aromatics, is transported by its pipeline to a Kinder Morgan terminal, and then sold to Texas Aromatics for use in the chemical or gasoline markets.

The Company competes with Enterprise, Chevron Phillips, ExxonMobil Chemical, Shell Chemical, Flint Hills and the Williams Companies.

Advisors' Opinion:

• [By Travis Hoium]

  What: Shares of propane company PetroLogistics (NYSE: PDH  ) fell as much as 10% today after reporting earnings.

  So what: Sales dropped 18% from a year ago to $159.4 million but the company swung to a net income of $41.4 million. On an adjusted basis net income fell from $64.4 million a year ago to $37.8 million in the second quarter.

• [By Seth Jayson]

  PetroLogistics (NYSE: PDH  ) reported earnings on July 24. Here are the numbers you need to know.

  The 10-second takeaway
  For the quarter ended June 30 (Q2), PetroLogistics met expectations on revenues and beat expectations on earnings per share.

• [By Seth Jayson]

  Calling all cash flows
  When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on PetroLogistics (NYSE: PDH  ) , whose recent revenue and earnings are plotted below.

source from Top Stocks To Buy For 2015:http://www.topstocksforum.com/top-5-chemical-stocks-to-watch-right-now-2.html