On Dec 1, Zacks Investment Research upgraded Ferrellgas Partners L.P. FGP to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Ferrellgas Partners has been witnessing rising earnings estimates on the back of its investments to expand midstream operations, the Bridger Logistics acquisition and organic growth projects. The Zacks Consensus Estimate for earnings for fiscal 2016 moved up 23.1% in the last 60 days as 2 out of 4 estimates were raised.
Ferrellgas Partners’ fourth-quarter fiscal 2015 results were mixed, as loss per share was wider than the Zacks Consensus Estimate, while total revenues were ahead of expectation. The partnership’s presence across the U.S. puts it in an advantageous position compared to other small-scale propane distributors. In addition, investments in technology provide the partnership with a competitive advantage over its peers.
Ferrellgas Partners has benefitted from acquisitions it has made over the years. With the completion of a large number of acquisitions to date, the partnership has grown from a single-location, independently owned propane retailer to a publicly traded organization. Going forward, the partnership is expected to become one of the largest propane companies in the U.S.
In addition, the partnership’s technology platform allows it to competently execute customer deliveries and maintain operational workflow for retail sale and delivery of bulk propane. These factors will collectively enable Ferrellgas Partners to improve service standards by reducing customer inconvenience.
Apart from Ferrellgas Partners, other well-ranked stocks worth considering in the oil refining and marketing space are EnLink Midstream, LLC ENLC, Sprague Resources LP SRLP and HollyFrontier Corporation HFC. All three have a Zacks Rank #2 (Buy).
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