However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector of the economy in search of companies with rising CAPS ratings.          

There are 280 stocks listed in the energy industry in the CAPS' screener, but we've unearthed more than a few with four- and five-star ratings. Those accolades mean our 160,000-plus CAPS members are confident that these stocks will beat the market in the months ahead. So, let's see what members are saying about the ones below:


CAPS Rating
(out of 5)

Recent Price

52-Week Price

Est. Long-Term

Energy XXI
(Nasdaq: EXXI)





Kodiak Oil & Gas





MarkWest Energy Partners





RAM Energy Resources
(Nasdaq: RAME)





Source: Motley Fool CAPS; Yahoo! Finance. CAPS rating as of April 15.

As the broader market averages continue to stage a pretty bold recovery, energy stocks have done even better, with the average company nearly doubling in share price from the year-ago period. Those returns include some strong performances from the companies above as well as from Brigham Exploration (Nasdaq: BEXP), which soared 841%, and Crosstex Energy, which more than quadrupled in value.

So let's take a closer look at why investors think that some of these other companies won't be jumping from the frying pan into the fire from the market's lofty heights.

Some spring in its step
While natural gas supplies have ballooned as a result of lower demand, the gap between inventories and demand for oil is narrowing and that's causing prices to rise. There was a 2.2 million-barrel drop in inventory last week where analysts had been expecting a 1.6 million increase. Oil prices surged to almost $86 a barrel, which has the International Energy Agency concerned about its impact on the economic recovery.

With a surfeit of oil and gas, however, it's easy to understand why MarkWest Energy Partners is doing well. It gathers, processes, stores, and transports the fuels, essentially operating a toll road for the producers. That could be why 96% of the CAPS members rating the pipeline operator believe it will outperform the market.

Yet with prices at such elevated levels, it's also not surprising to see most of these energy stocks posting such enormous gains. Kodiak Oil & Gas continues to expand its presence in the Bakken shale play in North Dakota, signing two deals that give it additional acreage in the important Williston Basin. Natural resource exploration company U.S. Energy (Nasdaq: USEG) is also warming up to the region, and along with its partner Brigham, has nine wells producing in the Bakken with a 10th just drilled and five more to come.

Having establishing a wide berth in the Bakken, Kodiak now controls approximately 104,000 gross acres in the Basin. That presence gives CAPS member jlre2 confidence the oil and gas explorer is the one oil play to own, while poudyg looks forward to oil's coming peak demand season to push it higher still: "The demand for oil will only increase during the upcoming season, therefore, the price of oil will go up and the stock price will go up as well."

And just as some companies are flocking to the wilds of North Dakota, others are pursuing lucrative deposits in warmer climes. Energy XXI and RAM Energy Resources are focusing their attention primarily in Texas and Louisiana.

Energy XXI shook things up earlier this year with a major discovery in the Gulf of Mexico at its Davy Jones ultradeep prospect. It will be developing the find with McMoRan Exploration (NYSE: MMR), but it proves the viability of going deep. CAPS member BR6RJB likens the discovery to finding black gold and increasing the potential for Energy XXI to become a buyout candidate.

Any one in on this at .25 is a genius. Partner [McMoRan] just struck some black gold in Davy Jones; In time [Energy XXI] recent aqcuisitions and current find will shoot this level to double; Possible take overs are not out of the question either

RAM Energy, though, has highly rated All-Star member TSIF enumerating several reasons why he thinks it won't outperform the broader market averages, with its financial position perhaps being the most troubling.

RAM Energy has NO cash left in the bank. Of course many companies operate off of revolvers, but with interest already pushing $5 Million per quarter on $246 Million of debt, accounts payable double accounts receivable, four straight losing quarters, and a book value of NEGATIVE 0.01 per share, it's hard to see where RAM Energy can bank on borrowing. 

The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. 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. Head over to CAPS today and share your thoughts with other investor analysts on whether you think these stocks are ready to bound higher.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.