The 2013 All-America Research Team: Natural Gas, No. 3: Faisel Khan

Although he falls to third place from No. 2,Faisel Khanof Citi is “the smartest analyst on the Street, with a deep knowledge of the issues,” one enthusiast proclaims. A trend that Khan says is gaining traction is “a broader use of capital markets to raise capital using the master limited partnership security.” The surge in U.S. hydrocarbon production, stemming from shale discoveries, has led to multibillion-dollar expansion plans for the next three years, he observes. However, none of the companies “really want to use their own stock to finance it, so they’re using the MLP security.” Announcements of MLP-related activity, such as moves to split a gas utility from a pipeline and MLP-related business, have usually driven stocks up 10 to 20 percent, he adds. This year’s theme “seems to be how much value can companies extract using this security,” declares Khan, who favors Williams Cos. of Tulsa, Oklahoma, on this basis. Because of operational issues in some of its shale-related assets and a June explosion at a Louisiana plant, the stock price has been volatile over the past several months. Once those problems are behind it, Khan forecasts, Williams is set for stable growth into 2015, with 20 percent dividend increases each year. —Carolyn Koo