EnergySouth ( ENSI) is a holding company concentrated on the purchase, distribution, storage and transportation of natural gas in southwest Alabama. The company's stock has been rated a buy since March 2005. Its strengths include strong net operating cash flow, a debt-to-equity ratio below the industry average and remarkable stock price growth. Although its stock price is expensive relative to its peers, we believe the higher price is justified. Though EnergySouth shows a disappointing return on equity, its overall financial strengths outweigh its weaknesses, and the stock merits a buy rating.