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Zacks Investment Ideas feature highlights: Flotek, Philips 66, Arc Logisitics, Ring Energy and Callon Petroleum

For Immediate Release

Chicago, IL- October 12, 2015 - Today, Zacks Investment Ideas feature highlights Features: Flotek ( FTK ), Philips 66 ( PSXP ), Arc Logisitics ( ARCX ), Ring Energy ( REI ) and Callon Petroleum ( CPE ).

5 Oil Stocks to Buy Today

It looks like there could be a sector rotation under way right now. What was moving higher all year is now moving lower and what was lower is now moving higher. I am talking about the moves in the Healthcare sector (higher to lower) and the Energy Sector (lower to higher).

As I think about how to be positioned to take advantage of this shift, I want stay away from trying to call a bottom on stocks that were running hard and higher for the last year or more. What I do want to do is find some energy stocks that will give me what I want. I want aggressive growth, and to me, the foundation of that idea is revenue growth.

Set Up A Screen

I put together a screen of Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy) stocks. I like the idea of revenue growth, but I wanted to tweak it a little to find a little something different.

The revenue category that I highlighted was revenue surprise. The revenue surprise is just the percentage of the actual revenue was ahead of the Zacks Consensus Estimate. I screened against the idea of a 15% or greater revenue beat. This tells me that on the topline, the company is outperforming the estimates and that is what we want to see continuing.

I should note that the screen produced 60 names, of which there were 12 in the oil sector in general. There were 12 in biotech alone and another 3 in other healthcare names.

The List

Flotek ( FTK ) is a Zacks Rank #2 (Buy) and led the group with at 27.4% topline surprise. This followed a -20% revenue surprise in the previous quarter. Estimates are calling for $97M in revenue for the September quarter, which would be a $10M sequential increase.

Philips 66 ( PSXP ) is a Zacks Rank #2 (Buy) and had the second largest positive revenue surprise last quarter with a 26% beat. Analysts are looking for a sequential increase of $3M when the company reports again. The $87M number, if reached, would mark the fifth straight quarter with a sequential increase in sales.

Arc Logisitics ( ARCX ) is the only Zacks Rank #1 (Strong Buy) on the list. It reported $19M in revenue when the Zacks Consensus Estimate was calling for $15M and that translated to a positive revenue surprise of 24.2%. The company is expected to post sales of $24M in the upcoming quarter with EPS of $0.28.

Ring Energy ( REI ) is a close fourth place on the list with a positive revenue surprise of 23% in the most recent quarter. Like most of the stocks on this list, it is a Zacks Rank #2 (Buy). The upcoming quarter is calling for $10M, just $1M more than the most recent report and on the bottom line the upcoming quarter is expected to be breakeven.

Another Play

One oil stock that I wanted to highlight here that didn't beat revenue estimate in any of the last three quarters is Callon Petroleum ( CPE ). The stock is a Zacks Rank #2 (Buy) and has beat the Zacks Consensus Estimate on the bottom line in each of the last two quarters. CPE is expected to post sales of $40M in its upcoming earnings report that is due out in early November. In just meeting that expectation, CPE would post its second consecutive quarter of sequential revenue growth.

The previous quarter for CPE may not have been a barnburner on the topline, but it posted EPS of $0.04 when the Zacks Consensus Estimate was looking for a breakeven quarter. As a result the stock vaulted higher by 17.9% in the session following the release. That idea is really brought into focus when you look at the 50% Earnings ESP, a measure developed by Zacks that is used to predict a potential EPS beat.

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FLOTEK INDU INC (FTK): Free Stock Analysis Report

PHILLIPS 66 PTR (PSXP): Free Stock Analysis Report

ARC LOGISTICS (ARCX): Free Stock Analysis Report

RING ENERGY INC (REI): Free Stock Analysis Report

CALLON PETE-DEL (CPE): Free Stock Analysis Report

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


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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