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Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, oil and gas explorer Energy XXI (Nasdaq: EXXI ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Energy XXI's business and see what CAPS investors are saying about the stock right now.
Energy XXI facts
|Headquarters (Founded)||Hamilton, Bermuda (2005)|
|Market Cap||$1.76 billion|
|Industry||Oil and gas exploration and production|
|Trailing-12-Month Revenue||$558 million|
|Management||CEO John Schiller, Jr. (since 2005)
CFO David Griffin (since 2005)
|Return on Equity (Average, Past 3 Years)||(3.2%)|
|Cash/Debt||$12.88 million / $765.93 million|
|Competitors||Denbury Resources (NYSE: DNR )|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 94% of the 147 members who have rated Energy XXI believe the stock will outperform the S&P 500 going forward. These bulls include hammertongs and All-Star Geofiz, who is ranked in the top 5% of our community.
Just last week, hammertongs brought Energy XXI's recent buy to our community's attention: "Just purchased gas and oil fields from Exxon (NYSE: XOM ) . This increases their reserves and product by 70% and I don't think the price of gas and oil will be going down in the long term no matter how many Volts hit the road."
In fact, Energy XXI's $1 billion acquisition will make it the third-biggest oil producer in the Gulf of Mexico's shallow waters behind Apache (NYSE: APA ) and Chevron (NYSE: CVX ) . And with the stock trading at a price-to-cash flow (7.7) discount to rival Denbury (8.6), as well as partner McMoRan Exploration (NYSE: MMR ) (8.9), Energy XXI seems like an offshore opportunity worth diving into.
CAPS All-Star Geofiz elaborates on the bull case:
In my opinion, [Energy XXI] is the better way to play the ultradeep shelf than through [McMoRan]. Reserves, while apparently very large, are quite a long way off due to technological challenges (specifically, wellheads and completions) and to extremely low gas prices, which will extend at least through 2011 and most likely well into 2012. [Energy XXI] has high quality liquids production to take up the slack in the meantime. They may operate at a small loss due to capital requirements, but the payoff will be very large in the longer term.
What do you think about Energy XXI, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!