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The stock market continued its overall trendless environment that it has been under since January, last week, with the Nasdaq finishing up just 0.58% for the week. The good news is that there was one area of the market that greatly outperformed the Nasdaq. That was the Oil and Gas sector. The Market Vectors Oil Services ETF OIH finished 5.35% higher for the week.

A lot of Oil and Gas stocks made strong moves this past week that helped a lot of high quality stocks within this sector set up in strong consolidation patterns that historically can lead to major price gains. Today, I want to investigate four high quality leading Oil and Gas stocks that I want to build a position in, as they continue to march higher.

What is a leading stock? A leading stock has strong EPS growth, strong sales growth, a high profit margins, a high return on equity, low to zero debt to shareholder equity, mutual fund ownership growth, management ownership, high future EPS estimates, a high Relative Strength line to the overall market, and is within 15-20% of its 52-week high. All information below is provided by my premium market data analysis provider MarketSmith.

The first stock we will go over is Pioneer Natural Resources (NYSE:PXD). Pioneer Natural Resources is an Irving, TX company engaged in the exploration and production of oil and gas in the United States and South Africa.

Pioneer Natural Resources EPS growth is explosive, growing 169%, 151%, 237%, 85%, 241%, 450%, 166%, and 95% the past eight quarters. Sales growth has been just as explosive, growing 84%, 84$, 51%, -59%, 27%, 59%, 50%, and 238% the past eight quarters. 2012 and 2013 annual EPS estimates are for gains of 21% and 37% respectively.

Pioneer Natural Resources has 46% debt to shareholder equity, a return on equity of 9%, a cash flow of $8.75 per share, spends 4.4% of its sales on R&D, and offers a 0.1% dividend. The current P/E ratio is at 22 which is in the low end of its 5-year historical range of 5-306.

Mutual funds interest in this stock grows every quarter, growing from 775 to 1134 funds the past eight quarters. Management still owns 2% of the shares outstanding. While that is not a lot, some ownership is better than none.

Next, we have Oil States International (NYSE:OIS). Oil States International is a Houston, TX provider of specialty products and services to oil and gas drilling and production companies worldwide.

Oil States International EPS growth is steady and big, growing 69%, 66%, 19%, 45%, 89%, 90%, 85%, and 95% the past eight quarters. Sales growth is just as impressive, growing 20%, 29%, 32%, 43%, 38%, 53%, 43%, and 45% the past eight quarters. 2012 and 2013 annual EPS estimates are for gains of 34% and 3% respectively.

Oil States International has 58% debt to shareholder equity, a return on equity of 18%, a solid cash flow of $10.26 per share, and an annual EPS growth rate of 2%. The P/E ratio is currently at 11 which is in the middle of its 5-year range of 2-21.

Mutual funds continue to show a steady growing interest in this company with ownership rising from 564 to 700 funds the past eight quarters. It should be noted, however, that fund ownership has fallen from 747 to 716 to 700 funds the past three reported quarters. Management still owns 2% of the shares outstanding.

Next up, we have a stock many are not familiar. Calumet Specialty Products Partners (NASDAQ:CLMT). Calumet Specialty Products Partners is an Indianapolis, IN company engaged in the production of hydrocarbon products in North America.

Calumet Specialty Products Partners EPS growth has not been steady but it is starting to turn up the heat, growing 0%, 392%, 8%, 131%, N/A, -22%, 92%, and 782% the past eight quarters. These numbers are growing, thanks to sales. Sales have grown 16%, 21%, 20%, 25%, 43%, 31%, 71%, and 93% the past eight quarters. 2012 annual EPS estimates is for a huge 162% gain. Unfortunately, as of now, annual EPS estimates for 2013 is for a 9% contraction.

Calumet Specialty Products Partners has 80% debt to shareholder equity, a return on equity of 8%, a cash flow of $3.65 per share, and offers a 9.3% dividend yield. The current P/E ratio of 15 is in the low end of its historical range of 2-48.

Mutual fund ownership is starting to accelerate. Mutual fund ownership has grown from 15 to 38 funds the past four quarters. Compare that to the previous four quarters when ownership fell from 13 to 12 funds. Management owns 5% of the shares outstanding.

Last but not least, we have Sunoco Logistics Partners LP (NYSE:SXL). Sunoco Logistics Partners LP is an MLP formed to own and operate complementary pipeline, terminaling and crude oil acquisition and marketing assets.

Sunoco Logistics Partners LP's EPS growth is heating up, growing -26%, 45%, 9%, 3%, 86%, 42%, 111%, and 114% the past eight quarters. Sales growth has been extremely strong, growing 58%, 32%, 34%, 19%, 51%, 52%, and 51% the past eight quarters.

Despite the current growth there might be future growth issues as 2012 and 2013 annual EPS estimates are for a contraction of 6% and 3% respectively. Those estimates have recently been raised so it is possible with upcoming earnings they will turn positive.

Sunoco Logistics Partners LP has 132% debt to shareholder equity, a high return on equity of 34%, a cash flow of $4.29 per share, a 20% annual EPS growth rate, and offers a 4.4% dividend yield. The current P/E ratio is currently at 12 which is in the mid range of its 5-year range of 4-18.

Mutual fund ownership has increased from 39 to 58 funds the past eight quarters. Management owns 0% of the shares outstanding.

All of these stocks make excellent investments for long-term investors as long as the growth continues. If any of these stocks have back to back quarters of slowing EPS and sales, investors should do their own research to see if the position still belongs in their portfolio.

I am personally a trend following trader and want to only be long these stocks as they move higher.

I have already started a position in Pioneer Natural Resources. Pioneer Natural Resources produced a pocket pivot point buy signal off the 10 day moving average on July 17th. I will continue to add to my holdings as it produces buy signals off the 10 day moving average.

Oil States International is currently building the right side of a consolidation pattern. Now that it is trending above the 50 and 200 day moving averages, I want to buy any pocket pivot point move off the 10 day moving average. If a signal is not produced, a breakout to a new 52-week high will be my buy signal.

Calumet Specialty Products Partners produced its first above average volume pocket pivot point buy signal off the 10 day moving average on Friday. Subsequent pocket pivot point buy signals off the 10 day moving average and a breakout to a new 52-week will be where I begin purchasing the stock.

Sunoco Logistics Partners LP has been trending higher on lower volume. A breakout to a new 52-week high on strong volume or a above average volume pocket pivot point buy signal off the 10 day moving average is where I will begin accumulating shares.

It must be noted, as a trend following trader, if I purchase any of these securities and they begin to move lower I will start cutting my losses immediately. If you trade stocks for a living and do not cut your losses, one day you will suffer the ultimate loss. It's only a matter of time.

Source: 4 Oil And Gas Stocks Outperforming The Overall Market