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To create the list below we screened the oil & gas sector for strong sales trends, comparing growth in revenue to growth in accounts receivable. Since accounts receivable is the portion of revenue not yet received, and there is no guarantee the money will ever be received, the smaller the portion of revenue made up of receivables, the healthier the company's revenue.

We screened for stocks seeing faster growth in revenue than accounts receivable year-over-year, as well as accounts receivable comprising a smaller portion of current assets over the same time period.

Finally, we researched their 13Fs looking for those with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform into the future.

Interactive Chart: Press Play to compare changes in analyst changes over the last two years for the three stocks mentioned below.

Would you invest in these companies? Use this list as a starting point for your analysis.

1. Hercules Offshore, Inc. (HERO): Provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the U.

  • Market cap at $1.09B, most recent closing price at $6.84.
  • Net institutional purchases in the current quarter at 10.4M shares, which represents about 6.85% of the company's float of 151.92M shares. The 2 top holders of the stock are Dimensional Fund Advisors, and Addison Clark Management.
  • Revenue grew by 24.47% during the most recent quarter ($202.63M vs. $162.79M y/y). Accounts receivable grew by 10.43% during the same time period ($169.72M vs. $153.69M y/y). Receivables, as a percentage of current assets, decreased from 43.91% to 35.46% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

2. MarkWest Energy Partners LP (MWE): Engages in the gathering, processing, and transportation of natural gas.

  • Market cap at $8.98B, most recent closing price at $61.08
  • Net institutional purchases in the current quarter at 11.6M shares, which represents about 9.97% of the company's float of 116.33M shares. The 2 top holders of the stock are Kayne Anderson Fund Advisors and Goldman Sachs Group.
  • Revenue grew by 11.26% during the most recent quarter ($371.51M vs. $333.91M y/y). Accounts receivable grew by -12.27% during the same time period ($198.77M vs. $226.56M y/y). Receivables, as a percentage of current assets, decreased from 50.79% to 30.27% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

3. Transocean Ltd. (RIG): Provides offshore contract drilling services for oil and gas wells worldwide.

  • Market cap at $15.58B, most recent closing price at $49.16
  • Net institutional purchases in the current quarter at 23.8M shares, which represents about 7.31% of the company's float of 325.69M shares. The 2 top holders of the stock are Icahn Associates, and Capital World Investors.
  • Revenue grew by 10.85% during the most recent quarter ($2,278M vs. $2,055M y/y). Accounts receivable grew by 1.1% during the same time period ($2,200M vs. $2,176M y/y). Receivables, as a percentage of current assets, decreased from 28.87% to 25.44% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

4. Spectra Energy Partners, LP (SEP): Operates as an investment arm of Spectra Energy Corp.

  • Market cap at $4.B, most recent closing price at $37.40
  • Net institutional purchases in the current quarter at 6.3M shares, which represents about 14.52% of the company's float of 43.38M shares. The 2 top holders of the stock are Neuberger Berman Group, LLC, and Tortoise Capital Advisors.
  • Revenue grew by 1.9% during the most recent quarter ($59M vs. $57.9M y/y). Accounts receivable grew by -3.63% during the same time period ($29.2M vs. $30.3M y/y). Receivables, as a percentage of current assets, decreased from 72.84% to 52.8% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

5. Transmontaigne Partners L.P. (TLP): Operates as a terminaling and transportation company.

Market cap at $682.95M, most recent closing price at $48.19

Net institutional purchases in the current quarter at 1.6M shares, which represents about 20.78% of the company's float of 7.70M shares. The 2 top holders of the stock are Oppenheimer Funds, and Energy Income Partners.

Revenue grew by 2.17% during the most recent quarter ($40.09M vs. $39.24M y/y). Accounts receivable grew by -62.94% during the same time period ($10.7M vs. $28.87M y/y). Receivables, as a percentage of current assets, decreased from 75.81% to 55.18% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

6. Alon USA Energy, Inc. (ALJ): Operates as an independent refiner and marketer of petroleum products in south central, southwestern, and western regions of the United States.

  • Market cap at $979.37M, most recent closing price at $16.06
  • Net institutional purchases in the current quarter at 1.8M shares, which represents about 8.83% of the company's float of 20.38M shares. The 2 top holders of the stock are Dimensional Fund Advisors, and Acadian Asset Management.
  • Revenue grew by 3.82% during the most recent quarter ($1,954.79M vs. $1,882.87M y/y). Accounts receivable grew by -25.51% during the same time period ($184.14M vs. $247.21M y/y). Receivables, as a percentage of current assets, decreased from 40.57% to 36.18% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

7. World Fuel Services Corp. (INT): Engages in the marketing and sale of marine, aviation, and land fuel products and related services worldwide.

  • Market cap at $2.67B, most recent closing price at $37.44.
  • Net institutional purchases in the current quarter at 4.1M shares, which represents about 5.87% of the company's float of 69.84M shares. The 2 top holders of the stock are Ruane, Cunniff & Goldfarb Inc.
  • Revenue grew by 6.56% during the most recent quarter ($9,935.81M vs. $9,323.95M y/y). Accounts receivable grew by 1.54% during the same time period ($2,193.87M vs. $2,160.56M y/y). Receivables, as a percentage of current assets, decreased from 69.2% to 66.86% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

8. Valero Energy Corporation (VLO): Operates as an independent petroleum refining and marketing company.

  • Market cap at $21.5B, most recent closing price at $39.64
  • Net institutional purchases in the current quarter at 28.0M shares, which represents about 5.08% of the company's float of 550.81M shares. The 2 top holders of the stock are State Street Capital, and The Vanguard Group.
  • Revenue grew by 0.06% during the most recent quarter ($34,695M vs. $34,673M y/y). Accounts receivable grew by -6.53% during the same time period ($8,336M vs. $8,918M y/y). Receivables, as a percentage of current assets, decreased from 55.84% to 50.64% during the most recent quarter (comparing 3 months ending 2012-12-31 to 3 months ending 2011-12-31).

*Accounting data sourced from Google Finance, institutional data from Fidelity, all other data sourced from Finviz

Source: Money Managers Are Buying 8 Oil & Gas Stocks With Encouraging Top-Line Growth