As an investor, it doesn't pay to follow the crowd.
In this series, though, we highlight a possible exception -- the collective wisdom of our CAPS community. Read the next section if you're unfamiliar with our methodology. Skip it if you want to go straight to the results.
Why this crowd is different
Jumping into a stock because your rich neighbor did, or because you heard about it from your friend's uncle who used to work on Wall Street, or because CNBC has been talking about it nonstop, is a recipe for disaster.
If there's one thing I've learned as a stock analyst, it's that any stock can be gussied up to sound like a world-beater. If there's a second thing I've learned, it's that being a smart person doesn't make you a good investor.
In the hands of a smart person with good communication skills, the never-were and never-will-be stocks sound like tickets to instant fortune. The ancient Greek philosophers made the distinction between rhetoric and knowledge: The former is convincing; the latter is true.
That's why we factor in track record in our Motley Fool CAPS community. We invite everyone to give stocks an outperform (i.e., a "buy") or underperform rating (i.e., a "sell") in CAPS. We then use those opinions to calculate a rating for each stock -- from one to a maximum five stars. But -- and this is a big distinction -- we give more weight to the opinions of folks whose picks have performed well in the past.
The biggest sells in energy
Without further ado, I present to you every one- and two-star energy stock with a market capitalization greater than $100 million. They are listed in order by the number of underperform ratings. Remember, stocks rated one or two stars are consensus sells by our CAPS community.
|
Company
|
Market Capitalization (in millions)
|
Underperform Picks
|
CAPS Rating (out of 5)
|
|
InterOil (NYSE: IOC )
|
$2,792
|
317
|
*
|
|
Houston American Energy (NYSE: HUSA )
|
$329
|
102
|
*
|
|
Isramco (Nasdaq: ISRL )
|
$147
|
77
|
*
|
|
Syntroleum (Nasdaq: SYNM )
|
$122
|
77
|
**
|
|
Miller Petroleum (Nasdaq: MILL )
|
$144
|
75
|
*
|
|
Brigham Exploration (Nasdaq: BEXP )
|
$1,915
|
67
|
**
|
|
Crosstex Energy (Nasdaq: XTEX )
|
$626
|
46
|
**
|
|
Zion Oil & Gas
|
$104
|
30
|
*
|
|
American Oil & Gas
|
$431
|
28
|
**
|
|
Carrizo Oil & Gas
|
$637
|
28
|
**
|
|
China Bio Energy Holding
|
$285
|
28
|
**
|
|
Camac Energy
|
$408
|
27
|
*
|
|
Hallador Energy
|
$311
|
27
|
*
|
|
Goodrich Petroleum
|
$427
|
26
|
**
|
|
Toreador Resources
|
$191
|
26
|
**
|
|
Pioneer Natural Resources
|
$6,728
|
22
|
**
|
|
Venoco
|
$913
|
22
|
**
|
|
Mariner Energy
|
$2,392
|
17
|
**
|
|
Sunoco Logistics Partners LP
|
$2,364
|
14
|
**
|
|
Magnum Hunter Resources
|
$274
|
10
|
**
|
|
Evolution Petroleum
|
$119
|
8
|
**
|
|
Ecopetrol S.A.
|
$74,368
|
6
|
**
|
Source: Motley Fool CAPS
More CAPS members think InterOil is a sell than any other energy stock. Do you think it deserves this lack of love? Make your thoughts known in CAPS by clicking here. Or just go there to do further research on one of these popular stocks.
Still curious? See which stocks were rated the top buys in energy.
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