NuStar Energy L.P. (NYSE: NS) is
a publicly traded limited partnership, based in San Antonio, operating 9,063 miles of pipeline, 85 terminal facilities, four crude oil storage tank facilities and two asphalt refineries. The terminals offer pilotage, tug assistance and other ship services. The firm is one of the largest asphalt refiners and independent liquids terminal operators in the United States. It also operates facilities in the Netherlands Antilles, Canada, Mexico, the Netherlands and the United Kingdom. BP plc (NYSE: BP) is a major competitor
NuStar pleased investors late last month, when it announced that strong asphalt revenues were expected to generate Q3 earnings of at least $2.25 per share. The Street was looking for $1.55. The CEO noted that tight supply conditions were resulting in a significant increase in the margins for asphalt and intermediate products.
NS shares
popped on the news and then passed into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with four "strong buys", two "buys", five "holds" and one "underperform". The NS P/E ratio (17.41), Price to Sales ratio (0.87), Price to Book ratio (1.15), Price to Cash Flow ratio (10.32), Sales Growth rate (329.11%), Revenue per Employee ($2.57M) and Net Income per Employee ($135.85k) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 23% of the outstanding shares. Over the past 52 weeks, the stock has traded between $42.20 and $63.89. A stop-loss of $43.70 looks good here. Note that the firm is expected to announce Q3 results in early November.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in either of the stocks discussed above.
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