4-Star Stocks Poised to Pop: EOG Resources

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Based on the aggregated intelligence of 115,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, oil and natural gas explorer EOG Resources (NYSE: EOG) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at EOG's business, and see what CAPS investors are saying about the stock right now.

EOG facts

Headquarters (Founded)	Houston, Texas (1985)
Market Cap	$21.25 billion
Industry	Independent Oil and Gas
TTM Revenue	$5.48 billion
Management	CEO Mark Papa (since 1998) CFO Timothy Driggers (since 2003)
Return on Equity (average last three years)	23.2%
Competitors	Devon Energy (NYSE: DVN), Andarko Petroleum (NYSE: APC)
CAPS members bullish on EOG also bullish on	Chesapeake Energy (NYSE: CHK), XTO Energy (NYSE: XTO)
CAPS members bearish on EOG also bearish on	Southwestern Energy (NYSE: SWN), Pioneer Natural Resources (NYSE: PXD)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 120 of 131 of the All-stars who have rated EOG -- some 90% -- believe the stock will outperform the S&P 500 going forward. These members include BearTrend and carbonates, both of whom are ranked in the top 20% of our community.

In June, BearTrend highlighted EOG as a play on increased drilling: "I think its not too late to be part of the energy sector, with Bush administration announce new way to get fuel. EOG is the closest company we got, exploring fuel in Alaska, Canada and in TX and IL."

An earlier pitch from carbonates in March shared that sentiment, drilling even further into the company's drilling skills:

EOG, despite its origins as an Enron spin-off, has maintained a pragmatic philosophy toward growing the company with the drillbit. They have consistently increased reserves year after year and operate in politically stable areas such as North America, the North Sea, and Trinidad. Because EOG was early to recognize the potential of resource plays like the Barnett, they are on the ground floor of most of the growing natural gas plays in North America. They recently proved they could make an oil resource play with 1,000 bbl/day wells in the Bakken (Williston Basin), which most operators have failed to make work for decades. This can only be attributed to skill.

... I am not so bullish on natural gas prices, which I expect to rise only slowly, as I am for quality players in the natural gas production business, and I think EOG is a quality player.

What do you think about EOG, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 115,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.