Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.


This Two-Minute Market Move Could Make You Rich

This Two-Minute Market Move Could Make You Rich[Revealed] How to generate instant income from the stock market. Over and over again. At will. This technique is so powerful – and safe – we’re guaranteeing you can use it to generate $1 million (or more) in retirement cash. And we’ll even send you a $1,000 check to kickstart your journey. Go here for details.


Uncovering the Little Darlings

By Robert Rapier on April 12, 2016

There is a lot of ground to cover in the energy sector. In order to cover it, I use stock screens to find companies with the most appealing prospects.

As I’ve mentioned before, I have developed a proprietary screening tool that extracts data from the S&P Global Market Intelligence database. To understand why screens are so important for parsing the universe of energy companies, consider that the top level of my latest screen identified 66,678 companies around the world in the energy sector. That doesn’t even count most renewable energy companies, which are generally ranked in other categories. (I use different screens to track these.)  

As I screen, I first narrow down the list by removing companies that aren’t publicly traded. I then usually further restrict the screen to those categorized as operating companies that have issued common stock or depositary receipts trading on the U.S. or Canadian stock exchanges. Doing so narrowed my latest screen down to a more manageable — but still daunting — 1,230 companies.  

At this stage I will normally sort companies according to subsectors, which include:

  • Coal and Consumable Fuels
  • Integrated Oil and Gas
  • Oil and Gas Drilling
  • Oil and Gas Equipment and Services
  • Oil and Gas Exploration and Production (“upstream”)
  • Oil and Gas Refining and Marketing (“downstream”)
  • Oil and Gas Storage and Transportation (“midstream”)

It is only then that I will begin to screen the different subsectors for financial metrics. I wait until this stage because the metrics for a large midstream MLP like Magellan Midstream Partners (NYSE: MMP) will look quite different from those for a small upstream company like Carrizo Oil & Gas (NASDAQ: CRZO). So I compare within subsectors. If I believe the upstream sector is poised to do well, I will compare promising candidates in that group.

Of course this screen is just one tool I use to flag promising companies. The next stage of due diligence requires delving into the particulars of specific companies. What is their outlook? The market’s expectations? Are there red flags? These are the types of things a screen can’t tell you.

For example, this past weekend I ran a new screen. Instead of breaking energy stocks up by subsector and comparing financials, I simply wanted to know which ones are currently most beloved by analysts. For this screen I specified that the stock had to be followed by more than a single analyst, and required an average recommendation of at least “Outperform,” or 2, on a scale that goes from 1 (“Buy”) to 5 (“Sell”).

The screen identified 291 stocks fulfilling these criteria. Only three had an average broker rating of 1.00 (indicating all brokers following the stock had it listed as “Buy”). Here is the Top 10 according to average broker rating:


  • EV – Enterprise Value in millions of dollars as of April 8, 2016
  • FCF – Free cash flow for the trailing twelve months (TTM)
  • YTD Ret – Total shareholder return (TSR), including dividends, in 2016

At first glance, most of the names on this list are probably unfamiliar. These are mostly small companies, which I could have screened out by requiring a minimum enterprise value or else a larger analyst following than two. A screen that required a minimum EV of $3 billion would have contained stocks more familiar to readers at the top.

Only two companies on the list have more than 10 analysts following them, and despite the strong recommendations both of those are down double-digits year-to-date. The top 10 shown here is down 10% year-to-date on average.

Scanning the list I immediately see a number of companies that wouldn’t pass my first level of due diligence, but keep in mind that the objective here was just to see what analysts are recommending. Not to follow the crowd of course, but rather to do a cross-check and see if there are any promising companies that have been otherwise weeded out by my screens.  

As I scanned a bit further down the list, there were familiar companies like Enterprise Products Partners (NYSE: EPD) at #11 and (with 28 analysts covering it) Rice Midstream Partners (NYSE: RMP) at #12, along with a number of Energy Strategist portfolio recommendations.

Despite the poor overall year-to-date performance of the stocks in the table above, I do see a couple of names that warrant further investigation. (That is also the case as I scan down past the top 10; perhaps 10-20% warrant additional due diligence.)

One of these prospects sits at the top of the list — TransMontaigne Partners (NYSE: TLP). I will take a closer look at this one in this week’s MLP Investing Insider.

Bear in mind that this is not the way I typically go about analyzing companies, but I do like to peel the onion many different ways. Sometimes, this approach can turn up a good company that may have otherwise escaped my standard stock screens, perhaps because it had an off year.

At that point the company becomes a candidate for our Energy Strategist portfolios, which I would share with my colleague Igor Greenwald for a final layer of due diligence. Of course it doesn’t always work in that order. Often it is Igor finding and doing due diligence on a promising company and then passing off to me for a second pass. In any case, the stocks we end up recommending have been evaluated by both of us, which helps reduce the risk that we have overlooked some important factor. That also allows us to evaluate a bigger universe of companies for potential inclusion in the portfolios.    

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)


You might also enjoy…


Boost Your Annual Income By As Much As $12,036

We’ve uncovered a unique income-boosting opportunity that allows you to collect up to $1,003 a month in extra government cash. 

This plan is available to everyone over the age of 18.

The amount you make isn’t dependent upon your marital status…

How much money you currently make…

Or even how much money you made in the past.

Best of all, because of the way Uncle Sam views the money that comes from this plan, your current—or future—Social Security benefits won’t be affected, either. 

There’s still time to get your name on the list for the next check run. 

I’ll show you how here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.