4-Star Stocks Poised to Pop: Eagle Rock
By
Brian D. Pacampara
July 13, 2009
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Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, natural gas partnership Eagle Rock Energy Partners, L.P. (Nasdaq: EROC) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Eagle Rock's business and see what CAPS investors are saying about the stock right now.
Eagle Rock facts
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Headquarters (founded)
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Houston, Texas (2002)
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Market Cap
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$207.33 million
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Industry
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Oil and Gas Storage and Transportation
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TTM Revenue
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$1.43 billion
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Management
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Chairman/CEO Joseph Mills
CFO Jeffrey Wood
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TTM Return on Equity
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16.6%
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Dividend Yield
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3.6%
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Competitors
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Enterprise Products Partners (NYSE: EPD)
Linn Energy (Nasdaq: LINE)
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CAPS members bullish on EROC also bullish on
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Chesapeake Energy (NYSE: CHK)
General Electric (NYSE: GE)
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CAPS members bearish on EROC also bearish on
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Precision Drilling Trust (NYSE: PDS)
Starbucks (Nasdaq: SBUX)
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Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, fully 314 of the 325 members who have rated Eagle Rock -- some 97% -- believe the stock will outperform the S&P 500 going forward. These bulls include GDubyaHayduke and All-Star rdpatton, who is ranked in the top 10% of our community.
Just two weeks ago, GDubyaHayduke tapped Eagle Rock as a solid bet to make some future income:
Fair hedges to at least 2011. Distribution has been .41 in past and I believe it will recover to that level. Currently paying down debt with distribution but will supposedly pay arrears once covenants are met. I'm bullish on [natural gas] and US oil. So take that into consideration.
In an earlier pitch, rdpatton expands on Eagle Rock as a natural turnaround play:
This stock has been hammered because they slashed their dividend in order to pay down debt. This caused a rotation from income investors to deep value investors. I think [Eagle Rock] is significantly undervalued at this level. Their earnings dropped … due to lower volumes from rigs being laid down due to lower [natural gas] prices and while this is concerning I believe that ultimately [natural gas] prices and thus drilling and volumes will rebound within a year. This is a highly-levered Nat Gas play.
What do you think about Eagle Rock, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.
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