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 evaluate tomorrow's greatest companies.
One tool offers a variety of resources to help with finding tomorrow's leaders: Motley Fool CAPS, a 120,000-member community of investors helping each other beat the market.
We've enlisted CAPS to screen the energy industry and get the story behind some of the more highly rated stocks. CAPS' nifty screener will help us find energy stocks with:
- A market cap of at least $100 million.
- A three year revenue growth rate of at least 20%.
- A price-to-earnings ratio of less than 25.
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
Here's a sampling from the list of stocks our screen pulled up today.
|
Company |
Revenue Growth Rate, Past 3 Years |
CAPS Rating (out of 5) |
|---|---|---|
|
Weatherford International |
27.6% |
***** |
|
Hercules Offshore |
132% |
**** |
|
Denbury Resources |
30.5% |
**** |
|
CNOOC |
20.1% |
**** |
Data and star rankings from CAPS.
Weatherford International
Oil and gas equipment and services provider Weatherford just reported an increase in net income of 27% to $370.6 million, joining Halliburton
Similar to peer National Oilwell Varco
Hercules Offshore
The drop in commodities prices, coupled with hurricanes in the Gulf, has sacked shares of offshore drilling services provider Hercules Offshore by more than 80% in the past three months. The storms caused $8.7 million in lost revenue for the third quarter alone. But some investors believe the sell-off is overdone, since Hercules has seen continued demand for its rigs.
Though Hercules' shallow-water equipment is missing out on the demand for deepwater rigs, many CAPS members see a strong long-term outlook, thanks to a healthy customer base, low debt ratio, and the nation's continued dependence on oil. As such, more than 97% of the 1,255 CAPS members rating Hercules expect it to beat the market going forward.
Denbury Resources
With its full upcoming development pipeline, oilfield developer Denbury Resources felt comfortable walking away from a deal to buy a stake in Conroe Field in Texas. Like Chesapeake Energy, the company is adapting to the changing environment by cutting its capital budget. It's already locked in 75% of next year's oil production for a range of $75 to $115 a barrel, and it's more than doubled its bank line, giving it a lot of flexibility.
Denbury's unique focus of revitalizing old oil fields to recover new value from them has piqued the interest of many a CAPS member, giving more than 98% of the 630 members rating Denbury Resources reason to expect the company to beat the S&P.
CNOOC
Chinese oil producer CNOOC was another major oil and gas player benefiting from the huge increase in oil prices earlier this year. The company grew profits in the first half of 2008 by 89% year over year, to $4 billion. Though oil has reversed most of its gains, CNOOC's vast drilling rights in China keep many CAPS members bullish on the company's long-term outlook.
But global expansion may add to the pot, with the company reportedly eyeing a stake in an offshore oil field in Angola owned by Marathon Oil
Let 120,000 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 they 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.
