Whether it's the corporate lunchroom, your cubicle, or the local watering hole after work, there are regular places we gather to discuss news, sports, or -- if you're like us -- stocks. Here at Motley Fool CAPS, we gather around the virtual water cooler daily to rate stocks and delve into their merits as investments.

Our 135,000-plus-strong CAPS community -- where members give the thumbs-up or thumbs-down to some 5,300 stocks -- has earned its points by seeking out the businesses it thinks will outperform the market. Below, we'll look at some of the top stocks in the CAPS universe that you're talking about the most, and we'll see whether you think they'll continue their winning ways.


CAPS Rating
(Out of 5)

No. of Calls

% Outperform Calls

Hercules Offshore (NASDAQ:HERO)




Precision Drilling (NYSE:PDS)




Sigma Designs (NASDAQ:SIGM)








Vaalco Energy (NYSE:EGY)




Energy is the watchword of the day. Whether it's the oil and gas drilling of Precision Drilling, the offshore drilling of Hercules Offshore, or the solar-harnessing focus of SunPower, investors remain interested in ways of generating power. But even so, the CAPS Energy tag has had a rough time over the past 30 days. The 460-plus stocks making up the tag have fallen by 6.8% on average -- enough to place it in the bottom 40 CAPS performers. Even big names such as ExxonMobil (NYSE:XOM) have been in a funk. As we'll see, there may be a good reason.

A tall drink of water
If Benjamin Graham thought Mr. Market was bipolar, he'd prescribe enough lithium to take down a horse for today's manic oil trader. Oil prices are volatile enough when we're in periods of prosperity, but last year's euphoric highs were quickly followed by depressing lows. And the wild price swings that accompany the ever-changing prognostications about our economic recovery have probably sent traders scurrying to their psychoanalysts' couches. Every day seems to bring conflicting reports about whether those economic green shoots are taking root or wilting, and in the process, oil has risen from below $40 earlier this year to above $70 last month. Today it sits at around $60 a barrel.

West African oil producer Vaalco Energy has seen its performance affected by the ups and downs of oil's price. Although it sold 57,000 more barrels of oil in the first quarter than it did in the year-ago period, revenues were cut in half to just $21.3 million, because the price of an average barrel of oil sold fell from $94 to just $42. So even though prices have risen since the first quarter, expect a similarly rough comparison next quarter, since the average price a year ago was more than $119 a barrel.

The lower price of oil has had an impact on Vaalco's ability to generate the hefty cash-flow streams it did last year. Operating cash flows in the first quarter fell to just $2.8 million, from $14.3 million a year ago. Four unsuccessful wells also didn't help matters; the company took a nearly $20 million charge on them.

Vaalco sells its Gabon production to Total (NYSE:TOT), the fifth-largest publicly traded integrated oil and gas company in the world. West Africa as a whole, meanwhile, is expected to be one of the most rapidly growing sources of oil and gas for the U.S. markets. And China thinks the region will help it achieve oil security, now that Sinopec Group announced the purchase of Addax Petroleum. Although the oil producer's Iraqi oil fields are undoubtedly its primary interest, Sinopec has been seeking a stronger presence in West Africa, too. Addax has 94 wells in Nigeria and 62 in Gabon.

Investors remain intrigued by the prospects Vaalco offers. CAPS member milkyway760 writes in this pitch that Vaalco's low price, coupled with exciting new opportunities, means it's time to drill into the oil producer.

[An] outstanding small cap energy company with working interest in various parts of Africa, UK, Texas Gulf, and Gulf of Mexico. Great management with the experience to guide through [today's] murky waters. Looking to expand its production facilities. Various new leads, including 2 major prospects, first will begin to be drilled in December with an estimated 20 million barrel surplus as well as 1 off the coast of [Gambia] with an estimated 10 million barrel surplus. Near its 52 week low, with oil prices [steadily beginning] to increase. Great time to get in.

Gather 'round
The insight you get from the CAPS community is like trying to take a sip from a fire hose. With so many good opinions about today's top companies, grab a pointy paper cup from the dispenser and join us at the Motley Fool CAPS water cooler, where your input can help guide other investors to stocks with bright prospects for growth. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page.

Sign up today for the completely free service, and let's hear what you have to say about the great and almost-great companies that interest you.

Sigma Designs is a Motley Fool Rule Breakers selection. Total is an Income Investor recommendation. Precision Drilling is a Global Gains selection. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Rich Duprey has no financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.