Dream Stocks for Energy Investors

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 discover the 10 best stocks of the past decade. But I'm more interested in the tools that can help me evaluate tomorrow's greatest companies.

Motley Fool CAPS offers a variety of resources to aid Fools in finding tomorrow's leaders. Our 135,000-member community is full of investors helping each other beat the market.

We'll enlist CAPS to screen for energy companies, then get the story behind some of its more highly rated stocks. CAPS' nifty screener will help us find 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
Below is a sample of stocks our screen returned. You can run this screen yourself -- remember, though, that your results may differ from ours as the market changes.

Data and star rankings from CAPS as of July 14.

XTO Energy
Unlike major integrated oil and gas companies such as ExxonMobil and ConocoPhillips (NYSE:COP), independent players like explorer and producer XTO haven't had to deal with making a profit from refining operations. Regardless, the industry slowdown has definitely moved its way up the supply chain and curtailed activity at XTO. Lately, however, the company's CFO said that he expects its rig count, which is now below 60, to bounce back to above 70 next year.

He also sees potential for an increase in natural-gas prices and said the company could be working with $1 billion or more to spend on acquisitions or stock buybacks next year. The company experienced big growth in output at its Barnett and Fayetteville shale plays in the first quarter, and as its prospects in the U.S. shale regions move into full production, XTO predicts its natural-gas production could double over the next five years. Given the continued growth prospects, 98% of the 2,303 CAPS members rating XTO Energy expect it to outperform the market.

SandRidge Energy
SandRidge's enterprise value sits just below $4 billion, while its reserves are valued much higher -- even based on today's cut-rate spot prices for natural gas. Some CAPS members see a discount opportunity in SandRidge and anticipate that natural-gas prices will eventually rise following the large drop last year. The U.S. Energy Information Administration agrees and predicts natural-gas prices will recover early next year.

Along with producers such as storied sector leader Chesapeake Energy and Petrohawk Energy (NYSE:HK), SandRidge has scaled back investment amid falling commodity prices. Also, in another action aimed to lighten its debt load, the company recently raised $258 million in two separate asset and drilling-rights sales. Despite the near-term pressures, nearly 97% of the 654 CAPS members rating SandRidge Energy remain bullish.

Weatherford International
While reaction to the economy has slowed exploration investments, big oilfield services companies such as Baker Hughes, Schlumberger (NYSE:SLB), and Halliburton (NYSE:HAL) continue to be active in many international markets. Weatherford itself has been focusing on expansion outside of North America, and the Swiss-based company recently picked up about $650 million in contracts in Mexico and was also awarded work in Iraq.

Weatherford also recently agreed to acquire the oilfield-services business of a top Russian oil company, TNK-BP, in a market expected to see high growth in coming years. One RBC Capital Markets analyst expects the Russian oilfield-services market to potentially double in the next five years, reaching $50 billion in sales. Despite negative free cash flow, many CAPS members seem to appreciate the company's solid asset position, as nearly 97% of the 797 members rating Weatherford expect it to beat the broader market.

Let 135,000 members be the jury
The collective wisdom of a huge pool of investors can help give context to a page of numbers from a stock screen -- but individual investors are still the best judges. Fools should always 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.