Suburban Propane (SPH) is a high yielding propane distributor that should benefit from the cold 2018/2019 winter when it reports Q2 earnings spanning (Jan-Mar 2019) on Thursday. Buying ahead of earnings may present an opportunity to own this cheap name ahead of positive newsflow. Q2 is by far their most profitable quarter due to seasonality.
The opportunity here appears asymmetric in that improved earnings are probably both on the basis of (1) expected higher volumes due to colder weather and (2) improved spreads between retail and wholesale propane costs potentially boosting margins.
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