Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and see what the 10 best stocks of the past decade were. But for my part, I'm more interested in the tools that can not only help me find new stock ideas, but also have the resources necessary to evaluate tomorrow's greatest companies.

There is a tool that offers a variety of resources to help with finding tomorrow's leaders: Motley Fool CAPS, a 125,000-member community of investors helping each other beat the market.

We've enlisted CAPS to screen the energy sector and get the story behind some of the more highly rated stocks. The nifty CAPS screener will help us find stocks with:

  • A market cap of at least $100 million.
  • A three-year average revenue growth rate of at least 20%.
  • A price-to-earnings ratio of less than 25.
  • At least 300 people making a call on the company.

Then we'll tap the collective intelligence of our CAPS members to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.

Opinions with the numbers
Below is a sample of stocks our screen returned (and you can run it as well -- remember that your results might be different as the market changes).


Revenue Growth Rate,
Past 3 Years

CAPS Rating
(5 stars max.)

SandRidge Energy (NYSE:SD)



Transocean (NYSE:RIG)



National Oilwell Varco (NYSE:NOV)



Petroleo Brasileiro (NYSE:PBR)



Data and star rankings from CAPS as of Jan. 23.

SandRidge Energy
Oklahoma-based SandRidge Energy estimated its production rose 56% in 2008 over 2007, but its stock has been obliterated over the past six months as oil and gas prices plunged. Like Chesapeake Energy and many others, SandRidge originally cut its 2009 capital budget and its number of rigs in operation. But the company recently broke ranks from other businesses that are curtailing spending. It decided to complete a private placement to raise cash, which allowed it to increase its 2009 capital spending from $500 million to $700 million. More than 97% of the 505 CAPS members rating SandRidge Energy expect it to outperform the market, with many believing the stock is a bargain at these levels.

The drop in energy prices has wiped out some of the smaller players in the oil industry, and offshore rig services firm Transocean has seen some of its backlog get shredded. Fortunately, the company's client list consists of mostly big names like ExxonMobil (NYSE:XOM) and Saudi Aramco -- firms that won't easily renege on a contract.

But with expanding expectations that the U.S. rig count will drop significantly in 2009, risks remain. Looking farther out, though, if energy prices recover, scuttled projects could be restarted, benefitting Transocean and service companies such as Schlumberger (NYSE:SLB) and Baker Hughes (NYSE:BHI). Many CAPS members still believe rig services is a good place to be in 2009, with nearly 98% of the 4,998 rating Transocean bullish.

National Oilwell Varco
Despite turmoil in commodities prices, analysts expect oilfield services firm National Oilwell Varco to report big 2008 sales increases over 2007. Although the stock has dropped with energy prices, the fundamentals of the company have remained steady. With a huge backlog and solid balance sheet -- including about $1 billion in cash -- the company is looking at more acquisitions. It's spent about $12 billion on purchases over the past three years, and it figures it can acquire smaller players struggling in today's market. Given its strong position, more than 98% of the 2,406 CAPS members rating National Oilwell Varco expect it to beat the S&P.

While many companies are cutting back spending, some oil firms, such as Total SA and Royal Dutch Shell, are keeping expensive oil shale dreams alive, including Brazil's government-controlled Petrobras. Petrobras is also pressing ahead with conventional oil operations: The company recently unveiled a $174.4 billion spending plan for the next four years. The plans include the development of its offshore Tupi oil field, one of the largest discoveries in decades. It also expects to increase its oil and natural gas output to 5.7 million barrels a day by 2020. More than 98% of the 3,496 CAPS members rating Petrobras have voted for it to beat the market.

Let 125,000 members be the judge
The collective wisdom of a huge pool of investors can help give context to a page of numbers developed through a stock screen. But even with an entire community of qualified opinions acting as the judge, individual investors are still the jury and should perform their own due diligence.

Run your favorite factors through the Motley Fool CAPS screener. It's totally free, and we think you'll like the results.

Fool contributor Dave Mock dreams of stocks and sugarplum fairies, but not together. He owns shares of ExxonMobil. Total and Petroleo Brasileiro are Motley Fool Income Investor recommendation. Chesapeake Energy is an Inside Value pick. National Oilwell Varco is a Stock Advisor selection. The Fool's disclosure policy screens the good, the bad and the ugly.