Ferrellgas Partners is on Expansion Mode - Analyst Blog

Ferrellgas Partners LP FGP continues to expand its operations through strategic acquisitions. The partnership announced its third acquisition in fiscal year 2014, taking the tally to approximately 245 to date.

On this occasion, Ferrellgas Partners acquired Country Boys Gas for an undisclosed amount. Commerce, GA-based Country Boys Gas is an independent propane company.

In fiscal year 2014, Ferrellgas Partners acquired Manitowoc and Sheboygan, WI-based Motor Propane Service in Dec 2013 and KS-based KanGas Corporation in Nov 2013.

Ferrellgas Partners continues with its acquisition plan of buying assets having the similar line of operations. As Country Boys Gas has significant presence in the state of Georgia and provides reliable services to its customers, the transaction is expected to be accretive in terms of adding new customers and experiencing operational synergy.

It is evident from past records that Ferrellgas Partners is strengthening its domestic operations, particularly in the Midwest, Southwest, Southeast, Northeast and Central regions of the U.S., to tap the growing demand. In fiscal 2013, the amount invested by the partnership to purchase new assets was up around 180% from the previous fiscal.

We remind investors that acquisitions in the past have helped Ferrellgas Partners to expand its core offerings and contributed significantly to its financial performance. In 2004, the partnership acquired Blue Rhino Corporation (“Blue Rhino”). The partnership's Blue Rhino operations reported double-digit volume gains on the back of colder weather in the second quarter of 2014.

Ferrellgas Partners has a stable liquidity position, including $18.3 million of cash and cash equivalents and available fund of $500 million under its secured credit facility. A favorable financial position supports Ferrellgas Partners systematic inorganic growth strategy.

Ferrellgas Partners currently has a Zacks Rank #3 (Hold). Other better-ranked stocks in this industry include Murphy USA Inc. MUSA, Valero Energy Corporation VLO and Marathon Petroleum Corporation MPC. While Murphy USA and Valero Energy hold a Zacks Rank #1 (Strong Buy), Marathon Petroleum carries a Zacks Rank #2 (Buy).