5-Star Stocks Poised to Pop: Star Gas Partners (SGU)

5-Star Stocks Poised to Pop: Star Gas Partners

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, home heating oil distributor Star Gas Partners (NYSE: SGU ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Star Gas' business and see what CAPS investors are saying about the stock right now.

Star Gas facts

Headquarters (founded)	Stamford, Conn. (1995)
Market Cap	$393.7 million
Industry	Gas utilities
Trailing-12-Month Revenue	$1.32 billion
Management	CEO Daniel Donovan CFO Richard Ambury
Return on Equity (average, past 3 years)	17.6%
Cash/Debt	$13.8 million / $137.3 million
Dividend Yield	5.3%
Competitors	AmeriGas Partners (NYSE: APU ) Global Partners (NYSE: GLP ) Inergy (NYSE: NRGY )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 97% of the 226 members who have rated Star Gas believe the stock will outperform the S&P 500 going forward. These bulls include All-Star topsecret10, who is ranked in the top 20% of our community, and DonkeyJunk.

Just last month, topsecret10 tapped Star Gas as a solid income opportunity: "Insiders have been poring money Into this company for quite some time. ... With an annual dividend of 31 cents and a yield over 4%, this company looks to be a solid addition to any portfolio."

Currently, Star Gas even sports a cheapish P/E of 11.4. That represents a clear discount to rivals such as AmeriGas (17.6), Global (17.5), and Inergy (21.3).

In a reply pitch from earlier this year, CAPS member DonkeyJunk offered a balanced look at Star Gas:

Important to note that they are expanding their propane exposure, but primarily provide heating oil in the northeast. As oil prices rises, customers tend to look for other means of heating their homes. Customer attrition is a concern here. That said, I own shares of SGU, reinvest the dividend, and intend to hang on for a while. They have a good business team.

What do you think about Star Gas -- or any other stock, for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On April 28, 2011, at 6:06 PM, HonuFan wrote:

Grrrrrr... seems lately everytime I've been watching a stock and am about to buy, MF jumps in with one of these articles and bumps the price up before I hit my buy price!
Report this Comment On April 29, 2011, at 4:25 PM, DonkeyJunk wrote:

DonkeyJunk is an unreliable idiot. I don't trust his analysis.
Report this Comment On April 29, 2011, at 4:35 PM, EnigmaDude wrote:

I hold a few shares in my IRA and would consider adding to my position if they can demonstrate good management going forward. If you look back to 2005, the stock was trading considerably higher (upwards of $20/share) and then plummeted to penny stock levels quite suddenly. If I recall from my research there was some sort of mis-management that occurred which has since been corrected. But it does give one pause...
Report this Comment On April 30, 2011, at 12:32 AM, DonkeyJunk wrote:

Management at the time you're referring to was apparently wringing the company dry through dividends. If you check their dividend rate, it was ridiculous. Soon after, the founder was re-installed and it's been a steady turnaround ever since.

updated 4 hours ago Sponsored by:
	DOW	12,529.75	33.60	0.27%
	S&P 500	1,320.68	1.82	0.14%
	NASD	2,839.38	-10.74	-0.38%

SGU	$3.85		+0.00	+0.00%
Star Gas Partners,…		CAPS Rating:

NRGY	$17.50		+0.00	+0.00%
Inergy, L.P.		CAPS Rating:

GLP	$22.23		+0.49	+2.25%
Global Partners LP…		CAPS Rating:

APU	$39.07		-0.29	-0.74%
AmeriGas Partners,…		CAPS Rating:

6

5-Star Stocks Poised to Pop: Star Gas Partners

Comments from our Foolish Readers

Report this Comment On April 28, 2011, at 6:06 PM, HonuFan wrote:

Report this Comment On April 29, 2011, at 4:25 PM, DonkeyJunk wrote:

Report this Comment On April 29, 2011, at 4:35 PM, EnigmaDude wrote:

Report this Comment On April 30, 2011, at 12:32 AM, DonkeyJunk wrote:

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