| Why Vanguard Natural Resources' Earnings May Not Be So Hot and 'Strong Buy' Noble May Soar, Outperforming Transocean |
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By Seth Jayson | More Articles February 12, 2012 | Comments (3) Although business headlines still tout earnings numbers, many investors have moved past net earnings as a measure of a company's economic output. That's because earnings are very often less trustworthy than cash flow, since earnings are more open to manipulation based on dubious judgment calls. Earnings' unreliability is one of the reasons Foolish investors often flip straight past the income statement to check the cash flow statement. In general, by taking a close look at the cash moving in and out of the business, you can better understand whether the last batch of earnings brought money into the company, or merely disguised a cash gusher with a pretty headline. Calling all cash flowsWhen you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. [Read the full article] HOUSTON, TX--(Marketwire -02/15/12)- EV Energy Partners, L.P. (NASDAQ: EVEP - News) today announced the closing of its previously announced public offering of 3,500,000 common units at $67.95 per unit to the public. The underwriters of the Partnership's common unit offering exercised in full their option to purchase an additional 525,000 common units at $67.95 per unit.The Partnership intends to use the net proceeds of approximately $268 million from the 4,025,000 common unit offering, after deducting the underwriting discounts and commissions and estimated offering expenses, and including the Partnership's general partner's proportionate capital contribution, to repay indebtedness under its existing revolving credit facility.Wells Fargo Securities, Citigroup, Raymond James, RBC Capital Markets, BofA Merrill Lynch, Credit Suisse and J.P. Morgan will act as joint book-running managers of the underwritten offering of common units. [Read the full article] Land drillers, as a group, are attractively valued today. We believe fears of another collapse in drilling activity similar to 2009 are overdone. While these drillers have no economic moat, their current competitive position is perhaps the best in the past decade. Prior industry cycles were driven by supply/demand dynamics, but with a U.S. fleet of mostly mechanical rigs that were refurbished over time as they aged. In our view, there was little differentiation between the top drillers and the rest of the industry. However, the shift toward horizontal and oil-directed drilling away from vertical and gas-directed drilling, thanks to the emergence of various shale plays in the United States, has driven huge demand for new premium land rigs, allowing the industry's top drillers to differentiate themselves from smaller peers by offering more powerful rigs. [Read the full article] 
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