The oil and gas-rich Permian Basin is the hunting grounds for Kinetik Holdings. Kinetik continues to put up dazzling numbers even as the overall market wavers. Last quarter it reported a 300% rise in EPS on a 21% hike in revenue. Kinetik will report Q2 results after the market close today.
On Wednesday, the Relative Strength (RS) Rating for Kinetik stock climbed into a new percentile, with a rise from 70 to 82. It passed a milestone along the way. IBD market research shows that the best stocks typically have an 80 or higher RS Rating as they begin their biggest runs.
Kinetik Stock A Favorite Of Institutional Investors
Among its other ratings, Kinetik has a strong 89 Composite Rating out of 99, and an 82 Earnings Per Share Rating. It also sports a B- Accumulation/Distribution Rating on an A+ to E scale. The B- rating shows that institutional investors like mutual funds and ETFs are buying more shares than selling.
Small-cap Kinetik is growing rapidly as it provides a variety of goods and services to oil and natural gas majors. Kinetik provides gathering, compression, processing, transportation and water management services. Those are services its customers require to bring natural gas, natural gas liquids and crude oil to market.
Kinetik reported 12 cents EPS last quarter, reversing from a 6-cent loss the same quarter a year earlier, ostensibly a 300% increase. Sales grew 21% to $341.4 million. Analyst consensus is for a 1% rise in EPS on a 3% increase in sales for Q2, according to FactSet. However, consensus is for EPS to surge 124% in Q3.
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On June 24 Kinetik announced it completed its acquisition of Durango Permian, which operates in the Northern Delaware Basin in New Mexico. "As a result of the acquisition, Kinetik has significantly enhanced its overall Delaware Basin wide footprint," Kinetik said in a news release. It will discuss the acquisition and related divestiture of other assets in its earnings call, slated for Thursday morning.
Broke Out From Flat Base
Kinetik stock on July 2 broke out from a flat base with a 41.77 buy point. It retreated amid recent market consolidation, but rose nearly 5% Tuesday as the market tries to rally. The most recent consolidation is a later-stage base, which can succeed but is riskier than a stage one or two base.
Kinetik stock earns the No. 12 rank among its peers in the Oil&Gas-Transportation/Pipeline industry group. Oneok, Western Midstream Partners and Hess Midstream are among the top 5 highly rated stocks in the group.
IBD's unique RS Rating tracks technical performance by using a 1 (worst) to 99 (best) score that shows how a stock's price performance over the trailing 52 weeks matches up against other publicly traded companies.
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