Glenn Rogers'  Instablog

Originally recommended on Nov. 17/08 (IWB #2841) at $26.88. Closed Friday at $43.99. (All currency in U.S. dollars.)

This stock has been another big gainer since I recommended it at $26.88, reaching a 52-week high of $50.85 before pulling back. Now that it's a little cheaper, I think this is a good opportunity to add your position. As a reminder, the company is a natural gas distributor which operates mainly in the Midwestern United States including Kansas, Oklahoma, Texas, and the Rocky Mountain regions. The company has also been active in shale projects in North Dakota and Oklahoma and is continuing to expand its pipeline network. I continue to like the distribution companies since the commodity prices do not affect them as much as they do the natural gas stocks, for example.

OKE recently reported first-half earnings per share of $1.82, up from $1.55 to the same period in 2009. Operating income for the three months ending June 30 increased to $178.7 million from $154.8 million for the same period last year. Although this is not runaway growth, it's slow and steady in a crazy environment and the stock still pays a nice dividend of $1.84 a year for a yield of 4.2%.

Action now: Buy with a target of $50.