Core Viewpoint - USA Compression Partners, LP (USAC) is showing potential for a bullish breakout as it has reached a significant support level and experienced a "golden cross" in its moving averages [1][2]. Technical Analysis - The "golden cross" occurs when a stock's 50-day simple moving average crosses above its 200-day simple moving average, indicating a potential bullish trend [2]. - A successful golden cross event consists of three stages: the stock price bottoms out, the shorter moving average crosses above the longer one, and the stock maintains upward momentum [3]. Recent Performance - USAC has moved 9% higher over the last four weeks, suggesting positive momentum [4]. - The company currently holds a 3 (Hold) rating on the Zacks Rank, indicating a neutral outlook [4]. Earnings Outlook - There has been a positive shift in earnings estimates for USAC, with no estimates decreasing in the past two months and two revisions higher, leading to an increase in the Zacks Consensus Estimate [4][6]. - This positive earnings outlook, combined with the technical factors, suggests that investors may want to monitor USAC for potential gains [6].

Key Takeaways USAC acquired J-W Power for about $860M, expanding its fleet and footprint in major U.S. natural gas regions.USA Compression funded the deal with $430M cash from its revolver and issued about 18.2M common units.USAC acquired J-W Power for about $860M, expanding its fleet and footprint in major U.S. natural gas regions.USA Compression Partners (USAC) , a Dallas, TX-based oil and gas equipment and services company, has completed the acquisition of J-W Power Company for approximately $860 million ...

Compression†) today announced the completion of its previously announced acquisition of J-W Power Company. Total consideration for the transaction was approximately $860 million. USAC funded $430 million of the purchase price in cash utilizing available capacity under its revolving credit facility, with the balance of the consideration coming from approximately 18.2 million common units issued based on an effective price a. DALLAS--(BUSINESS WIRE)--USA Compression Partners, LP (NYSE: USAC) ("USA ...

Core Insights - The focus is on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1][2] Group 1: Investment Strategy - The investment strategy emphasizes high-yield, dividend growth ideas, targeting dividend yields up to 10% [2] - The service offers investment research on various asset classes including REITs, ETFs, closed-end funds, preferreds, and dividend champions [2] Group 2: Market Context - Market volatility has returned, particularly affecting AI-related stocks like Oracle, which experience significant daily price swings [2] - The current investment approach favors defensive stocks with a medium- to long-term horizon amidst market fluctuations [2]

Core Insights - Investors are gravitating towards safer, low-beta stocks due to anticipated market uncertainty [1] - Companies are increasingly utilizing complex borrowing methods for funding data center projects, contributing to market nervousness [1] Stock Recommendations - Suggested low-beta stocks include J & J Snack Foods Corp. (JJSF), USA Compression Partners, LP (USAC), Natural Gas Services Group, Inc. (NGS), and The Vita Coco Company, Inc. (COCO) [2] Stock Characteristics - Beta measures the volatility of a stock relative to the market, with a beta of less than 1 indicating lower volatility [3][4] - A beta range of 0 to 0.6 is used as a screening criterion for less volatile stocks [5] Screening Criteria - Stocks must have a positive price change over the last four weeks [5] - Average 20-day trading volume should exceed 50,000 [6] - Stock price must be at least $5 [6] - Zacks Rank of 1 indicates strong buy potential [6] Company Profiles - **J & J Snack Foods**: Strong balance sheet, negligible debt, focused on capital return to shareholders, and plans to accelerate stock repurchases [7] - **USA Compression Partners**: Positioned to benefit from rising demand for cleaner fuels and LNG exports, with plans to add new equipment by year-end [8][9] - **Natural Gas Services**: Benefits from increased LNG exports, leading to higher demand for compression equipment [10] - **The Vita Coco Company**: Leading producer of coconut water, experiencing strong demand growth across regions [11]

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Core Viewpoint - USA Compression Partners has shown a slight increase in share price but has underperformed compared to the S&P 500, raising questions about future performance leading up to the next earnings release [1][2]. Financial Performance - In Q3, USA Compression reported an adjusted net profit of 26 cents per common unit, exceeding the Zacks Consensus Estimate of 22 cents and improving from 13 cents in the previous year [3]. - The company generated revenues of $250.3 million, a 4.3% increase year-over-year, surpassing the Zacks Consensus Estimate of $247 million, driven by a 3.4% rise in contract operations and a 23.4% increase in related-party revenues [4]. - Adjusted EBITDA rose by 10% to $160.3 million, exceeding the estimate of $146.8 million [4]. - Distributable cash flow increased to $103.8 million from $86.6 million in the prior-year quarter, with net income rising to $34.5 million from $19.3 million [5]. - The average monthly revenue per horsepower increased to $21.46 from $20.60, above the estimate of $21.42, while the horsepower utilization rate was 94%, slightly down from 94.6% a year ago [6]. Cost and Capital Expenditures - The company reported costs and expenses of $166.3 million, down 4.1% from $173.5 million in the previous year [8]. - Growth capital expenditures amounted to $37.3 million, while maintenance capital expenditures were $9 million [8]. Guidance and Future Outlook - USA Compression expects full-year 2025 adjusted EBITDA to be between $610 million and $620 million, with distributable cash flow projected to range from $370 million to $380 million [9]. - Estimates for the company have trended upward, with a 12.5% shift in consensus estimates over the past month, indicating positive market sentiment [10][12]. - The company holds a Zacks Rank 1 (Strong Buy), suggesting expectations for above-average returns in the coming months [12]. Industry Context - USA Compression operates within the Zacks Oil and Gas - Mechanical and Equipment industry, where another player, Nov Inc., has seen a 6.1% gain over the past month despite reporting a slight revenue decline [13]. - Nov Inc. is expected to post earnings of $0.25 per share for the current quarter, reflecting a 39% decrease from the previous year, with a Zacks Rank 3 (Hold) [14].

Core Insights - USA Compression Partners, LP (USAC) is a significant entity in the natural gas compression sector, headquartered in Dallas, Texas, focusing on essential compression services for natural gas transportation and storage [1] Group 1: Stock Performance and Market Position - Citigroup has adjusted USAC's stock grade to Neutral, maintaining a hold action, with the current stock price at $24.58 [1][5] - USAC's stock price has decreased by 2.73%, or $0.69, trading at $24.58 despite recent positive developments [3][5] - The stock has fluctuated between $24.53 and $25.34 today, with a yearly high of $30.10 and a low of $21.53, indicating a dynamic market environment [4] Group 2: Strategic Developments - Citigroup raised USAC's price target from $25 to $26, coinciding with USAC's strategic acquisition of J-W Power Company for approximately $860 million [2][5] - The acquisition is expected to significantly enhance USAC's operational capabilities by adding over 800,000 horsepower, expanding its fleet to roughly 4.4 million active horsepower [2] - This acquisition broadens USAC's geographic reach and introduces new service lines, such as aftermarket support and specialized manufacturing, likely solidifying its market presence [3]

Core Insights - USA Compression Partners, LP (USAC) has announced an agreement to acquire J-W Power Company for approximately $860 million, marking a significant step in its strategic growth within the natural gas compression market [1][12]. Expanding Scale and Fleet Capacity - The acquisition will combine USAC's and J-W Power's fleets to achieve around 4.4 million active horsepower, enhancing USAC's ability to meet the increasing demand for natural gas compression services [2][10]. - The deal adds over 0.8 million active horsepower across key regions, strengthening USAC's market position [3][8]. Geographic Diversification and Market Reach - The integration of J-W Power's assets expands USAC's geographic footprint into critical regions such as the Northeast, Mid-Con, Rockies, Gulf Coast, Bakken, and Permian Basin, which are vital for natural gas production [3][4]. - This diversification helps mitigate risks associated with regional downturns and regulatory changes, ensuring a more stable operational base [4]. Broader Business Model and Service Offerings - The acquisition introduces new business lines, including aftermarket services and parts distribution, enhancing USAC's service offerings [5][6]. - USAC gains specialized manufacturing services, allowing for more customized solutions to meet diverse customer needs [5][6]. Stronger Customer Base With Long-Term Relationships - The acquisition adds a diversified portfolio of customers with established long-term relationships, providing a steady revenue stream for USAC [7][8]. - The combination of customer bases creates opportunities for cross-selling and deeper client relationships [7][9]. Enhanced Market Leadership in Mid-to-Large Horsepower Compression - USAC's acquisition solidifies its leadership in the mid-to-large horsepower compression market, increasing its market share in a segment with growing demand [10][11]. - The expanded capacity enables USAC to cater to larger-scale projects, maintaining a competitive edge [11]. Financially Attractive and Deleveraging Transaction - The acquisition is expected to be accretive to USAC's distributable cash flow in the near term, with a valuation of approximately 5.8x the estimated adjusted EBITDA for 2026 [12][13]. - The deal is structured to enhance USAC's financial flexibility and reduce its leverage ratio, positioning it for greater operational efficiency [13]. Looking Ahead: A Bright Future for USAC - This acquisition reinforces USAC's status as a dominant player in the natural gas compression sector, well-positioned to meet evolving client needs and capitalize on growth opportunities [14][15]. - The transaction is expected to close in the first quarter of 2026, setting the stage for continued growth and value delivery to unitholders [15].