No doubt about it, companies making alternative energy products have been a hot bunch lately, sending the portfolio of many investors soaring. But I've found investments from another sector that are beating the pants off alternative energy stocks -- and I know where you can find out more about them.

Would the real hot stocks please come forward?
The 5,600 stocks that more than 105,000 Motley Fool CAPS community members have rated include descriptive "tags" that group them with other companies sharing similar qualities -- a country of origin, a sector, or an end product, for example. Clicking the Alternative Energy tag pulls up a list of 50 stocks that have gained 27.8% in the past year.

But CAPS tags can lead you to stocks that have outpaced even the past year's returns from the alternative energy group: Independent Oil & Gas. This group comprises 98 companies that have outperformed the returns of the broader market and the alternative energy group, with a whopping 41.4% average gain in the past year.

Each group has its share of winners and losers, of course, but CAPS can be a great resource for zeroing in on potential opportunities in each area.

From macro to micro
You can sort tag groups by their CAPS ratings, from one to a maximum five stars, and then see which players -- from Wall Street to Main Street -- are bullish or bearish on a company, and why.

For instance, here are a few of the stocks in the Alternative Energy group:


CAPS Rating
(out of 5)

1-Year Performance

Suntech Power (NYSE:STP)



Applied Materials (NASDAQ:AMAT)



MEMC Electronic Materials (NYSE:WFR)



First Solar (NASDAQ:FSLR)



Sources: Yahoo! Finance and Motley Fool CAPS, as of May 30.

Now, based on the interest in the CAPS community, here's a sampling of Independent Oil & Gas stocks that investors may want to consider.


CAPS Rating

1-Year Performance

Chesapeake Energy (NYSE:CHK)



Canadian Natural Resources (NYSE:CNQ)






Suncor Energy (NYSE:SU)



Sources: Yahoo! Finance and Motley Fool CAPS, as of May 30.

My energy is better than your energy         
As many types of alternative energy still rank far behind fossil fuel products in terms of their development and efficiency, worldwide demand still drives the development of sources for oil and gas. In natural gas, leading producer Chesapeake Energy has been dramatically hiking production to keep supply up with demand.

Last quarter, Chesapeake saw a 31% increase in production, including triple-digit increases at its Barnett Shale and Fayetteville Shale sites. On track to become the largest U.S. natural gas producer, Chesapeake has also seen its proven reserves increase 6% year-to-date, giving the company more opportunity to sell off assets to raise cash when necessary.

And some new cash may be necessary. Chesapeake continues to land big new gas discoveries at various sites around the U.S., causing the company to increase its capital budget by about $950 million in the next two years. Some investors may believe that stock in a $30 billion explorer couldn't possibly go higher, but Chairman and CEO Aubrey McClendon apparently disagrees. He recently bought another 600,000 shares of his company at around today's prices.

Many CAPS investors are following McClendon's lead, too, with more than 97% of the 4,215 investors who've rated the company expecting Chesapeake to outperform the market going forward.

Sandy oil
Producing refined oil can be more capital intensive and complex than natural gas, particularly for companies such as Suncor, which have extensive oil sands operations. While sifting sands for hydrocarbons is not the easiest way to end up with a barrel of oil, the skyrocketing price for crude has made oil sands operations more attractive lately.

The difficulty in scaling up oil sands infrastructure has taken its toll on Suncor, as production suffered in 2007 due to upgrades and unplanned outages. And since oil sands production involves the consumption of natural gas to create steam in the process, oil sands miners are also stung by higher commodity prices themselves.

But that hasn't stopped Suncor from laying out an ambitious plan to spend $20.6 billion on expansion projects designed to improve production capability and more fully realize the potential trapped in the oil sands of Canada. Also earning high favor in CAPS, more than 97% of the 513 All-Star players rating Suncor envision the company outperforming the market in the future.

Before you buy ...
Of course, what's happened in the past is no indicator of where investors should be putting their capital now. But the underlying reasons behind dramatic run-ups in stocks or groups of stocks can clarify trends that may significantly affect investments. Just make sure to do your own due diligence rather than following crowds or individual recommendations.