We expect natural gas processor and distributor,
MarkWest Energy Partners LP
), to beat expectations when the partnership reports its
first-quarter 2013 results after the closing bell on May 8,
Why a Likely Positive Surprise?
Our proven model shows that MarkWest is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
estimate of 33 cents and the Zacks Consensus Estimate of 32
cents, stands at +3.13%. This is a meaningful and leading
indicator of a likely positive earnings surprise for
Zacks Rank #3 (Hold):
The stocks with a Zacks Rank of #1 (Strong buy), #2 (Buy) and #3
(Hold) have a significantly higher chance of beating earnings.
The Sell-rated stocks (#4 and #5) should never be considered
while going into an earnings announcement.
The combination of MarkWest's Zacks Rank #3 (Hold) and +3.13%
ESP makes us very confident in looking for a positive earnings
beat on May 8, 2013.
What is Driving the Better-Than-Expected
We like MarkWest's high-quality and diverse portfolio of
midstream assets, which generates stable and recurring revenues
from long-term fee-based contracts. Moreover, we remain
particularly bullish about MarkWest's prospects in the Marcellus
Shale play in western Pa. and W.Va.
In addition, MarkWest is one of the largest processors of
natural gas in the Northeast and is also the largest gatherer of
natural gas in the prolific Carthage field in East Texas.
Moreover, the partnership has a number of other gas gathering
and intrastate gas transmission assets in the Southwest,
primarily in Texas and Okla.
Finally, we remain upbeat as MarkWest recently raised its
first-quarter 2013 cash distribution to 83 cents per unit ($3.32
per unit annualized), representing an increase of approximately
1.2% sequentially and 5.1% year over year.
Other Stocks to Consider
Other oil and gas companies you may consider on the basis of
our model, which have the right combination of elements to post
an earnings beat this quarter are as follows:
) has an earnings ESP of +22.50% and a Zacks Rank #1 (Strong
Delek US Holdings Inc.
) has an earnings ESP of +0.86% and a Zacks Rank #3 (Hold).
Northern Tier Energy LP
) has an earnings ESP of +6.48% and Zacks Rank #3 (Hold).
DELEK US HLDGS (DK): Free Stock Analysis
MARKWEST EGY PT (MWE): Free Stock Analysis
NORTHERN TIER (NTI): Free Stock Analysis
SEMGROUP CORP-A (SEMG): Free Stock Analysis
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