ONEOK (NYSE: OKE) purchases, transports, stores and distributes natural gas in the United States. The firm's ONEOK Partners segment is engaged in the fractionation of natural gas liquids and the gathering and processing natural gas, primarily in the Mid-Continent and Rocky Mountain regions. The Distribution unit provides natural gas distribution services to residential, commercial, and industrial customers in Oklahoma, Kansas, and Texas. The Energy Services operation focuses primarily on marketing natural gas. ONEOK sold its gathering and processing, natural gas liquids, pipelines and storage businesses to ONEOK Partners in 2006 and became that company's general partner and 46% owner.

The firm pleased investors last week, when it boosted its FY07 EPS guidance from $2.62-2.72 to $2.75-2.79. The Street had been looking for $2.66. Management also issued FY08 guidance of $2.75-3.15 ($2.87 consensus). OKE shares popped on the news and then moved into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the shares with two "strong buys", one "buy" and six "holds". The OKE P/E ratio (19.83), Price to Sales ratio (0.40), Price to Book ratio (2.66), Price to Cash Flow ratio (7.40), Price to Free Cash Flow ratio (28.53) and Revenue per Employee ($2.77M) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 74% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $39.26 and $55.27. A stop-loss of $42.00 looks good here. Note that the firm is expected to report Q4 results on February 25th, after the closing bell.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.