We expect publicly traded partnership,
NuStar Energy LP
) to beat expectations when the partnership reports its
first-quarter 2013 results before the opening bell on Apr 24,
Why a Likely Positive Surprise?
Our proven model shows that NuStar is likely to beat earnings
because it has the right combination of two key factors.
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 48 cents and the Zacks Consensus Estimate of 45
cents, stands at +6.67%. This is a meaningful and leading
indicator of a likely positive earnings surprise for units.
Zacks Rank #2 (Buy):
The stocks with 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 NuStar's Zacks Rank #2 (Buy) and +6.67% ESP
makes us very confident in looking for a positive earnings beat
on Apr 24, 2013.
What is Driving the Better-than-Expected
NuStar - that was spun off from the U.S. refiner
Valero Energy Corp.
) in 2006 - boasts a diversified asset base and robust
distribution-growth prospects. A strong pipeline of organic
growth projects and contribution from acquisitions provide the
partnership with an above peer-group
Moreover, NuStar has a track record for consistent
distribution growth - its current quarterly distribution of
$1.095 per unit ($4.38 per unit annualized) is up approximately
120% over its distribution rate at the time of its IPO in
In addition, the partnership has consolidated its business
through a combination of organic efforts and accretive
acquisitions over the last few years. NuStar's recently formed
asphalt joint-venture partnership with a private investment firm
is also a welcome move, aimed at reducing the pipeline operator's
unpredictability about its future cash flows, while trimming the
requirement for large working capital investment.
Based on the success of the partnership's operations -
particularly in the booming Eagle Ford shale region - the Zacks
Consensus Estimate for the first quarter of 2013 has increased by
4.7% to 45 cents per unit, over the last 30 days. Moreover, the
first-quarter 2013 Zacks Consensus Estimate of 45 cents per unit
represents earnings per unit growth of a whopping 80% over the
Other Stocks to Consider
Here are some other firms you may want to consider on the
basis of our model, which shows that they have the right
combination of elements to post an earnings beat this
EPL Oil & Gas Inc.
) has an earnings ESP of +12.50% and a Zacks Rank #1 (Strong
Stone Energy Corp.
) has an earnings ESP of +2.86% and a Zacks Rank #1 (Strong
EPL OIL&GAS INC (EPL): Free Stock Analysis
NUSTAR ENERGY (NS): Free Stock Analysis
STONE ENERGY CP (SGY): Free Stock Analysis
VALERO ENERGY (VLO): Free Stock Analysis
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