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Validea's Top Five Energy Stocks Based On Warren Buffett - 5/12/2019

The following are the top rated Energy stocks according to Validea's Patient Investor model based on the published strategy of Warren Buffett. This strategy seeks out firms with long-term, predictable profitability and low debt that trade at reasonable valuations.

TRANSPORTADORA DE GAS DEL SUR SA (ADR) (TGS) is a small-cap value stock in the Oil & Gas Operations industry. The rating according to our strategy based on Warren Buffett is 72% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Transportadora de Gas del Sur S.A. is engaged in the transportation of natural gas and production and commercialization of natural gas liquids (Liquids). The Company operates through four segments: Natural Gas Transportation Services, Liquids Production and Commercialization, Other Services and Telecommunications. The Company's pipeline system connects gas fields in southern and western Argentina with gas distributors and industries in those areas and in the greater Buenos Aires area. It also provides midstream services, which consist of gas treatment, removal of impurities from the natural gas stream, gas compression, wellhead gas gathering and pipeline construction, operation and maintenance services. The Company transports gas through approximately 5,675 miles of pipeline, of which it owns 4,745 miles. It operates the remaining 930 miles, which are owned by the Gas Trusts.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

EARNINGS PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: FAIL
RETURN ON TOTAL CAPITAL: FAIL
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

MAGELLAN MIDSTREAM PARTNERS, L.P. (MMP) is a large-cap value stock in the Oil Well Services & Equipment industry. The rating according to our strategy based on Warren Buffett is 59% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Magellan Midstream Partners, L.P. is principally engaged in the transportation, storage and distribution of refined petroleum products and crude oil. The Company operates through three segments: refined products, crude oil and marine storage. As of December 31, 2016, its asset portfolio, including the assets of its joint ventures, consisted of its refined products segment, consisting 9,700-mile refined products pipeline system with 53 terminals, as well as 26 independent terminals not connected to its pipeline system and its 1,100-mile ammonia pipeline system; its crude oil segment, consisted of approximately 2,200 miles of crude oil pipelines and storage facilities with an aggregate storage capacity of approximately 26 million barrels, of which 16 million are used for contract storage, and its marine storage segment, consisted of five marine terminals located along coastal waterways with an aggregate storage capacity of approximately 26 million barrels.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

EARNINGS PREDICTABILITY: PASS EARNINGS PREDICTABILITY: PASS
DEBT SERVICE: PASS DEBT SERVICE: PASS
RETURN ON EQUITY: FAIL RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: FAIL RETURN ON TOTAL CAPITAL: FAIL
FREE CASH FLOW: PASS FREE CASH FLOW: FAIL
USE OF RETAINED EARNINGS: PASS USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS SHARE REPURCHASE: NEUTRAL
INITIAL RATE OF RETURN: PASS INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS EXPECTED RETURN: FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

ONEOK, INC. (OKE) is a large-cap growth stock in the Oil & Gas - Integrated industry. The rating according to our strategy based on Warren Buffett is 42% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: ONEOK, Inc. is an energy midstream service provider in the United States. The Company owns and operates natural gas liquids (NGL) systems, and is engaged in the gathering, processing, storage and transportation of natural gas. THe Company's operations include a 38,000-mile integrated network of NGL and natural gas pipelines, processing plants, fractionators and storage facilities in the Mid-Continent, Williston, Permian and Rocky Mountain regions. The Company operates through three business segments. The Natural Gas Gathering and Processing segment provides midstream services to contracted producers in North Dakota, Montana, Wyoming, Kansas and Oklahoma. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute NGLs and store NGL products primarily in the Mid-Continental, Permian Basin and the Rocky Mountain regions. The Natural Gas Pipelines segment provides transportation and storage services to end users.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

EARNINGS PREDICTABILITY: PASS EARNINGS PREDICTABILITY: PASS EARNINGS PREDICTABILITY: PASS
DEBT SERVICE: PASS DEBT SERVICE: PASS DEBT SERVICE: FAIL
RETURN ON EQUITY: FAIL RETURN ON EQUITY: PASS RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: FAIL RETURN ON TOTAL CAPITAL: FAIL RETURN ON TOTAL CAPITAL: FAIL
FREE CASH FLOW: PASS FREE CASH FLOW: FAIL FREE CASH FLOW: FAIL
USE OF RETAINED EARNINGS: PASS USE OF RETAINED EARNINGS: PASS USE OF RETAINED EARNINGS: FAIL
SHARE REPURCHASE: PASS SHARE REPURCHASE: NEUTRAL SHARE REPURCHASE: NEUTRAL
INITIAL RATE OF RETURN: PASS INITIAL RATE OF RETURN: PASS INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS EXPECTED RETURN: FAIL EXPECTED RETURN: FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

ULTRAPAR PARTICIPACOES SA (ADR) (UGP) is a mid-cap growth stock in the Oil & Gas Operations industry. The rating according to our strategy based on Warren Buffett is 23% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Ultrapar Participacoes SA is a Brazil-based company primarily engaged in the automotive fuel retail. The Company operates in five segments: Gas distribution (Ultragaz), which distributes liquefied petroleum gas (LPG) to residential, commercial and industrial consumers in the South, Southeast and Northeast regions of Brazil; Fuel distribution (Ipiranga), which operates the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles and lubricants, as well as provides related activities across the Brazilian territory; Chemicals (Oxiteno), which produces ethylene oxide, as well as its primary derivatives and fatty alcohols; Storage (Ultracargo), which operates liquid bulk terminals, primarily in the Southeast and Northeast regions of Brazil, and Drugstores (Extrafarma), which trades pharmaceutical, hygiene and beauty products through its drugstore chain in the states of Para and Piaui, among others.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

EARNINGS PREDICTABILITY: PASS EARNINGS PREDICTABILITY: PASS EARNINGS PREDICTABILITY: PASS EARNINGS PREDICTABILITY: PASS
DEBT SERVICE: PASS DEBT SERVICE: PASS DEBT SERVICE: FAIL DEBT SERVICE: FAIL
RETURN ON EQUITY: FAIL RETURN ON EQUITY: PASS RETURN ON EQUITY: PASS RETURN ON EQUITY: FAIL
RETURN ON TOTAL CAPITAL: FAIL RETURN ON TOTAL CAPITAL: FAIL RETURN ON TOTAL CAPITAL: FAIL RETURN ON TOTAL CAPITAL: FAIL
FREE CASH FLOW: PASS FREE CASH FLOW: FAIL FREE CASH FLOW: FAIL FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS USE OF RETAINED EARNINGS: PASS USE OF RETAINED EARNINGS: FAIL USE OF RETAINED EARNINGS: FAIL
SHARE REPURCHASE: PASS SHARE REPURCHASE: NEUTRAL SHARE REPURCHASE: NEUTRAL SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS INITIAL RATE OF RETURN: PASS INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS EXPECTED RETURN: FAIL EXPECTED RETURN: FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

ANTERO RESOURCES CORP (AR) is a mid-cap value stock in the Oil & Gas - Integrated industry. The rating according to our strategy based on Warren Buffett is 0% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.

Company Description: Antero Resources Corporation is an oil and natural gas company. The Company is engaged in the exploration, development and acquisition of natural gas, natural gas liquids (NGLs) and oil properties located in the Appalachian Basin. The Company's segments include the exploration, development and production of natural gas, NGLs and oil; gathering and processing; water handling and treatment, and marketing of excess firm transportation capacity. The Company's subsidiary, Antero Midstream Partners LP (Antero Midstream) is a master limited partnership, which owns, operates and develops midstream energy infrastructure primarily to service its production and completion activity. Its exploration and development activities are supported by the natural gas gathering and compression assets of its subsidiary, Antero Midstream, as well as by third party gathering and compression arrangements. It also has access to additional low-pressure and high-pressure pipelines.

The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.

EARNINGS PREDICTABILITY: PASS EARNINGS PREDICTABILITY: PASS EARNINGS PREDICTABILITY: PASS EARNINGS PREDICTABILITY: PASS EARNINGS PREDICTABILITY: FAIL
DEBT SERVICE: PASS DEBT SERVICE: PASS DEBT SERVICE: FAIL DEBT SERVICE: FAIL DEBT SERVICE: FAIL
RETURN ON EQUITY: FAIL RETURN ON EQUITY: PASS RETURN ON EQUITY: PASS RETURN ON EQUITY: FAIL RETURN ON EQUITY: FAIL
RETURN ON TOTAL CAPITAL: FAIL RETURN ON TOTAL CAPITAL: FAIL RETURN ON TOTAL CAPITAL: FAIL RETURN ON TOTAL CAPITAL: FAIL RETURN ON TOTAL CAPITAL: FAIL
FREE CASH FLOW: PASS FREE CASH FLOW: FAIL FREE CASH FLOW: FAIL FREE CASH FLOW: PASS FREE CASH FLOW: FAIL
USE OF RETAINED EARNINGS: PASS USE OF RETAINED EARNINGS: PASS USE OF RETAINED EARNINGS: FAIL USE OF RETAINED EARNINGS: FAIL USE OF RETAINED EARNINGS: FAIL
SHARE REPURCHASE: PASS SHARE REPURCHASE: NEUTRAL SHARE REPURCHASE: NEUTRAL SHARE REPURCHASE: PASS SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS INITIAL RATE OF RETURN: PASS INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS EXPECTED RETURN: FAIL EXPECTED RETURN: FAIL

For a full detailed analysis using NASDAQ's Guru Analysis tool, click here

Since its inception, Validea's strategy based on Warren Buffett has returned 217.04% vs. 171.45% for the S&P 500. For more details on this strategy, click here

About Warren Buffett: Warren Buffett is considered by many to be the greatest investor of all time. As the chairman of Berkshire Hathaway, Buffett has consistently outperformed the S&P 500 for decades, and in the process has become one of the world's richest men. (Forbes puts his net worth at $37 billion.) Despite his fortune, Buffett is known for living a modest lifestyle, by billionaire standards. His primary residence remains the gray stucco Nebraska home he purchased for $31,500 nearly 50 years ago, according to Forbes, and his folksy Midwestern manner and penchant for simple pleasures -- a cherry Coke, a good burger, and a good book are all near the top of the list -- have been well-documented.

About Validea: Validea is an investment research service that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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