Best US Companies For 2014

There's no getting around it: The global oil market is complex. Prices can change because of the slightest disruption in the market, and sometimes because of an anticipated disruption where nothing has even happened yet.�

Still, there are some simple truths that give us a general idea of where oil and gas prices are heading. One simple thing to look at is reserve replacement cost, or how much a company needs to spend to replace its current production levels. Let's see what trends are emerging in this metric and what it means for the oil and gas industry�

Keeping the shelves stocked
According to Ernst & Young's annual U.S. Oil and Gas Reserves study, reserve replacement costs are some of the highest we've seen in several years. The average cost to replace a barrel of oil equivalent in 2012 was $32.72, almost double what it was in 2011. The closest comparable figure was in 2008, when reserve replacement costs were $39.34 per boe.�

Reserve replacement costs can rise for two reasons. The most obvious one is that it becomes more difficult to find new resources, so the cost to find a new barrel of oil goes up. Most of the time, the cost of oil moves in tandem with reserve replacement costs. As prices for oil increase, companies are more willing to explore higher-cost, higher-risk regions, and they may not always find oil. One example is Royal Dutch Shell's (NYSE: RDS-A  ) attempt to find oil offshore from Alaska. The company has spent $4.5 billion in the region but has yet to produce a barrel of oil from the region. The company can take such a chance on this region is because the price of oil gives it some flexibility.�

Top 10 Clean Energy Companies To Invest In 2015: Mdu Res Group Inc (MDU)

MDU Resources Group, Inc. operates as a diversified natural resource company in the United States. The company�s Electric segment generates, transmits, and distributes electricity in Montana, North Dakota, South Dakota, and Wyoming. As of December 31, 2012, this segment provided its electric services to approximately 131,000 residential, commercial, industrial, and municipal customers in 177 communities and adjacent rural areas. Its Natural Gas Distribution segment distributes natural gas in Montana, North Dakota, South Dakota, and Wyoming, as well as in Idaho, Minnesota, Oregon, and Washington. This segment served approximately 859,000 residential, commercial, and industrial customers in 334 communities and adjacent rural areas. The company�s Pipeline and Energy Services segment provides natural gas transportation, underground storage, processing, and gathering services, as well as oil gathering through regulated and nonregulated pipeline systems primarily in the Rocky Mountain and northern Great Plains regions of the United States. This segment also provides cathodic protection and other energy-related services. Its Exploration and Production segment engages in the acquisition, exploration, development, and production of oil and natural gas in the Rocky Mountain and Mid-Continent regions of the United States and in and around the Gulf of Mexico. The company�s Construction Materials and Contracting segment mines, aggregates, and markets crushed stone, sand, gravel, and related construction materials, including ready-mixed concrete, cement, asphalt, liquid asphalt, and other value-added products. This segment also provides utility excavation services and inside electrical wiring, cabling, and mechanical services; sells and distributes electrical materials; and manufactures and distributes specialty equipment. MDU Resources Group, Inc. was founded in 1924 and is based in Bismarck, North Dakota.

Advisors' Opinion:

• [By David Dittman]

  Question: I have been a fan of MDU Resources Inc (NYSE: MDU) because of its many operations including oil and gas, materials, construction, and now refining. Long-term thoughts?

• [By Richard Stavros]

  Created with YCharts

  
  In addition to beating the market since the beginning of the year, diversified energy utilities, such as MDU Resources Group Inc (NYSE: MDU), Dominion Resources Inc (NYSE: D) and Sempra Energy (NYSE: SRE), significantly outperformed pure-play or predominantly all-electric utilities, such as Duke Energy Corp (NYSE: DUK) and Entergy Corp (NYSE: ETR), by as much as several percentage points (See Chart B).
  
  Interestingly, among top performers, there was no dominant strategy for exploiting natural gas demand, as these firms were involved in all aspects of the value chain–from exploration and production to distribution and storage. These companies have not only been benefiting from a natural gas surplus, but also from the pressing need to expand US energy infrastructure to deliver this newfound bounty to businesses and households.
  
  

  Chart B: Diversified Energy Utilities Outperformed Electric-Only Peers

Best US Companies For 2014: Chart Industries Inc (GTLS)

Chart Industries, Inc., incorporated on June 25, 1992, is an independent global manufacturer of engineered equipment used in the production, storage and end-use of hydrocarbon and industrial gases. The Company supplies engineered equipment used throughout the global liquid gas supply chain. It operates in three segments: energy and chemicals (E&C), distribution and storage or (D&S), and biomedical. The E&C and D&S segments manufacture products used primarily in energy-related and general industrial applications, such as the separation, liquefaction, distribution and storage of hydrocarbon and industrial gases. Through its BioMedical segment, it supplies cryogenic and other equipment used in the storage and distribution of biological materials and oxygen, used primarily in the medical, biological research and animal breeding industries.

The Company�� products, including vacuum insulated containment vessels, heat exchangers, cold boxes and other cryogenic components, are used throughout the liquid gas supply chain for the purification, liquefaction, distribution, storage and end-use of hydrocarbon and industrial gases. It is a manufacturer of standard and engineered equipment primarily used for low-temperature and cryogenic applications. The Company�� primary customers are multinational producers and distributors of hydrocarbon and industrial gases and their suppliers. The Company sells its products and services to more than 2,000 customers worldwide.

Energy and Chemicals Segment

The Company is a designer and manufacturer of cryogenic brazed aluminum and air cooled heat exchangers. The Company�� brazed aluminum heat exchangers are incorporated into assemblies and cold boxes to facilitate the progressive cooling and liquefaction of air or hydrocarbon mixtures for the subsequent recovery or purification of component gases. In hydrocarbon processing industries, its brazed aluminum heat exchangers allow producers to obtain purified hydrocarbon by-products, such ! as methane, ethane, propane and ethylene, which are commercially marketable for various industrial or residential uses. In the industrial gas market, its brazed aluminum heat exchangers are used to produce high purity atmospheric gases, such as oxygen, nitrogen and argon, which have diverse industrial applications. The Company�� air cooled heat exchangers are used in multiple markets to cool fluids to allow for further processing or to provide condensing of fluids, including hydrocarbon, petrochemical, natural gas processing, and power generation. Its compact Core-in-Kettle heat exchangers are designed to replace shell-and-tube exchangers, offering significantly more heat transfer surface per unit volume and improving the efficiency of chillers, vaporizers, reboilers and condensers in hydrocarbon applications including ethylene, propylene and LNG.

The Company is a designer and fabricator of cold boxes. Cold boxes are engineered systems used to reduce the temperature of gas mixtures to the point where component gases liquefy and can be separated and purified for further use in multiple industrial, scientific and commercial applications. In the hydrocarbon processing industry, its cold box systems are used in natural gas processing and in the petrochemical industry. In the industrial gas industry, cold box systems are used to separate air into its atmospheric components, including nitrogen, oxygen and argon, where the gases are used in a diverse range of applications, such as metal production and heat treating, enhanced oil and gas production, coal gasification, chemical and oil refining, the quick-freezing of food, wastewater treatment and industrial welding. The construction of a cold box system generally consists of one or more brazed aluminum heat exchangers and other equipment packaged in a box consisting of a structural metal frame encasing a complex system of piping, valves and instrumentation.

The Company designs and manufactures of engineered hydrocarbon process syst! ems speci! fically for those markets requiring cryogenic processing technology. These Concept-to-Reality process systems incorporate many of Chart�� core products, including brazed aluminum heat exchangers, Core-in-Kettles, cold boxes, vessels, pipe work and air cooled heat exchangers. These systems are used for global LNG projects, including projects in the United States and China for both domestic LNG production for diesel displacement and in the conversion of LNG import terminals to export terminals, and also for use in global nitrogen rejection units (NRU) and propane dehydrogenation (PDH).

Distribution and Storage Segment

The Company is a supplier of cryogenic equipment to the global bulk and packaged industrial gas industry as well as for energy-related applications. Its products span the entire spectrum of industrial gas demand from small customers requiring cryogenic packaged gases to large users requiring custom engineered cryogenic storage systems. Its products in the D&S segment include Cryogenic Bulk Storage Systems, Cryogenic Packaged Gas Systems, Cryogenic Systems and Components, LNG Applications, Beverage Liquid CO2 Systems, and Cryogenic Services. The Company is a supplier of cryogenic bulk storage systems (stationary tanks, trailers, and ISO tanks) of various sizes ranging from 500 gallons to 250,000 gallons. End use customers for its cryogenic storage equipment include industrial gas producers and distributors, chemical producers, manufacturers of electrical components, health care organizations, food processors and businesses in the oil and natural gas industries.

The Company is supplier of cryogenic packaged gas systems of various sizes ranging from 160 liters to 3,000 liters. Cryogenic liquid cylinders are used extensively in the packaged gas industry to allow smaller quantities of liquid to be easily delivered to the customers of industrial gas distributors on a full-for-empty or fill-on-site basis. Principal customers for its liquid cylinders are th! e same gl! obal industrial gas producers and the North American industrial gas distributors who purchase its cryogenic bulk storage systems. It has developed two technologies in the packaged gas product area: ORCA Micro-Bulk systems and Tri-fecta Laser Gas assist systems. ORCA Micro-Bulk systems bring the ease of use and distribution economics of bulk gas supply to customers formerly supplied by high pressure or cryogenic liquid cylinders. The Tri-fecta Laser Gas assist system was developed to meet the assist gas performance requirements for new high powered lasers being used in the metal fabrication industry. The Company�� line of cryogenic components, including VIP, engineered bulk gas installations, specialty liquid nitrogen (LN2), end-use equipment and cryogenic flow meters are recognized in the market for their reliability, quality and performance. These products are sold to industrial gas producers, as well as to a diverse group of distributors, resellers and end users.

The Company supplies cryogenic solutions for the storage, distribution, vaporization, and application of LNG. LNG may be utilized as a primary source of heat or power at industrial or residential complexes located away from a natural gas pipeline. LNG may also be used for peak shaving or as a backup supply at remote locations. It refers to its LNG distribution products as a Virtual Pipeline as the natural gas pipeline is replaced with cryogenic distribution to deliver the gas to the end user. It supplies cryogenic trailers, bulk storage tanks, tap-off facilities, and vaporization equipment specially configured for LNG into Virtual Pipeline applications. LNG may also be used as a fuel to power vehicles or ships. The Beverage Liquid CO2 Systems product line consists primarily of vacuum insulated, bulk liquid CO2 containers used for beverage carbonation in restaurants, convenience stores and cinemas, in sizes ranging from 100 pounds to 750 pounds of liquid CO2 storage. It also manufactures and market non-insulated, bulk fountain ! syrup con! tainers for side-by-side installation with its CO2 systems. Its beverage systems are sold to national restaurant chains, soft drink companies and CO2 distributors. Its primary competitors for bulk liquid CO2 beverage delivery systems are Taylor-Wharton and other producers of high-pressure gaseous CO2 cylinders. The Company operates locations in the United States and Europe providing installation, service, repair and maintenance of cryogenic products, including storage tanks, liquid cylinders, cryogenic trailers, cryogenic railcars, cryogenic pumps, cryogenic flow meters and VIP.

BioMedical Segment

The Company�� BioMedical segment consists of various product lines built around its core competencies in cryogenics and pressure swing adsorption, but with a focus on the respiratory and biological users of the liquids and gases instead of the large producers and distributors of cryogenic liquids. Its products in the BioMedical segment include Respiratory Products, Cold Storage Systems, and Commercial Oxygen Generation Systems. Its respiratory oxygen product line consists of a range of medical respiratory products, including liquid oxygen systems and ambulatory oxygen systems, both of which are used primarily for the in-home supplemental oxygen treatment of patients with chronic obstructive pulmonary diseases, such as bronchitis, emphysema and asthma.

The Cold Storage Systems product line consists of vacuum insulated containment vessels for the storage of biological materials. The primary applications for this product line include medical laboratories, biotech/pharmaceutical, research facilities, blood and tissue banks, veterinary laboratories, large-scale repositories and artificial insemination, particularly in the beef and dairy industry.

The Company competes with Linde, Sumitomo, Kobe, Fives, Linde, Air Products, Praxair, Air Liquide, Taylor-Wharton International or Taylor-Wharton and CVA/INOX, Taylor-Wharton and Beijing Tenhai Industrial Cylinders, Acme Cr! yogenics,! Vacuum Barrier Corporation, and Ind-Burma Petroleum Company.

Advisors' Opinion:

• [By Seth Jayson]

  Chart Industries (Nasdaq: GTLS  ) is expected to report Q1 earnings on April 25. Here's what Wall Street wants to see:

  The 10-second takeaway
  Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Chart Industries's revenues will increase 32.2% and EPS will increase 39.6%.

• [By Marc Courtenay]

  Chart Industries (GTLS), which reports earnings on April 22nd, has been bandied about for months as a takeover target. It manufactures and supplies engineered equipment used in the production, storage, and end-use of hydrocarbon and industrial gases in the United States, the Czech Republic, China, Germany, and internationally.

Best US Companies For 2014: Fenner PLC (FENR)

Fenner PLC is a manufacturer and distributor of reinforced polymer products. It operates in two segments: engineered conveyor solutions, which is engaged in the manufacture of rubber, polyvinyl chloride and steel cord conveyor belts, ply, solid woven and steel cord conveyor belting for mining, power generation and industrial applications and advanced engineered products, which is engaged in the manufacture of precision polymer products; problem-solving power transmission and motion transfer components; silicone and complex hoses for heavy duty trucks, buses and off-road vehicles; seals and sealing solutions for the fluid power and oil and gas industries; technical textiles for medical and industrial applications and silicone based products for medical applications; rollers for digital image processing and medical diagnostics, and fluropolymer components for fluid and gas handling. Advisors' Opinion:

• [By Inyoung Hwang]

  Fenner Plc (FENR) rallied 5.2 percent to 407.4 pence, its highest price since March 20. UBS AG started coverage of the conveyor-belt maker with a buy rating, saying shares are cheap. The bank predicted the stock will climb to 460 pence in the next 12 months.

Best US Companies For 2014: China Yuchai International Limited (CYD)

China Yuchai International Limited, through its subsidiaries, manufactures and sells diesel and natural gas engines primarily in the People�s Republic of China (PRC). It operates in two segments, Yuchai and HLGE. The company provides engines for light, medium, and heavy-duty for highway vehicles; generator sets; and marine and industrial applications, as well as supplies after-market parts and services. It also offers diesel power generators that are used in the construction and mining industries; diesel engine parts; and remanufacturing services. In addition, the company operates hotels and engages in property development activities primarily in the PRC and Malaysia. It distributes its products directly to auto plants and agents. The company was founded in 1951 and is based in Singapore.

Advisors' Opinion:

• [By Rich Duprey]

  Following the abrupt resignation of director and President Benny H. Goh on May 27, China Yuchai International (NYSE: CYD  ) has been operating with an interim officer, Kok Ho Leong,�who also held the position of CFO while a replacement was found.

Best US Companies For 2014: Principal Financial Group Inc(PFG)

Principal Financial Group, Inc. provides retirement savings, investment, and insurance products and services worldwide. The company?s Retirement and Investor Services segment provides retirement savings and related investment products and services, including a portfolio of asset accumulation products and services primarily to small and medium-sized businesses and individuals in the United States. This segment offers products and services to businesses for defined contribution pension plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, and employee stock ownership plan consulting services; and annuities, mutual funds, and bank products and services to the employees of its business customers and other individuals. Principal Financial Group?s Principal Global Investors segment offers a range of equity, fixed income, and real estate investments, as well as specialized overlay and advisory services to institutional inve stors. The company?s Principal International segment offers retirement products and services, annuities, mutual funds, institutional asset management, and life insurance accumulation products in Brazil, Chile, China, Hong Kong SAR, India, Indonesia, Malaysia, Mexico, Singapore, and Thailand. Principal Financial Group?s U.S. Insurance Solutions segment offers individual life insurance, as well as specialty benefits in the United States. Its individual life insurance products include universal and variable universal life insurance and traditional life insurance; and specialty benefit products comprise group dental and vision insurance, individual and group disability insurance, and group life insurance, as well as fee-for-service claims administration and wellness services. The company was founded in 1879 and is based in Des Moines, Iowa.

Advisors' Opinion:

• [By Patricio Kehoe] ts newest deal with private benefits company Liazon Corp., through which the firm will offer employer-sponsored group benefit plans to small and medium businesses. While the company already sells ancillary benefit plans, this deal will now also include dental, life insurance, disability insurance and critical illness coverage in an attempt to stay on top of the insurance industry. As an industry leader, Principal has over $466 billion in assets under management and 19 million customers, fragmented among small and medium-size businesses. Furthermore, its solid fourth quarter results have encouraged investment gurus like Paul Tudor Jones (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) to recently acquire large amounts of the company�� shares. So, let�� see what this insurer has in store for the future.

  Broadening Horizons

  Although Principal�� core business is in life insurance, the company has been pursuing a more diverse growth strategy lately, and is now focused on expanding its position in the retirement service and asset management segment. With almost 30,700 pension plans covering over 3.4 million customers, this business��growth rate has not only boosted overall profitability, marked by a 31% annual increase in operating earnings for fiscal 2013, but also helped offset the headwinds of low interest rates and volatility in the emerging markets. In fact, the fourth quarter showed a 65% boost in premium and fee income for the segmenta , consequence of the rollout of total retirement suite products.

  Moreover, Principal�� emphasis on retirement products and its use of capital salesforce for distribution has added on to the natural switching cost advantage in the insurance industry. Since plan sponsors provided with pension assets rarely switch providers, the company will likely benefit in the long term from its persistency, as seen in the quarterly 9% bump in recurring deposits.

  On another note, Principal�� fee-based b