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5 Energy Stocks That Goldman Sachs Loves

BOSTON (TheStreet) -- Goldman Sachs (GS) is one of Wall Street's top stock pickers.

The New York-based investment bank's Conviction Buy List is closely followed by institutional and individual investors. Based on Friday's close, the following five conviction buys offer the most return potential of the 58 stocks on the list. Below, the stocks are ordered by potential upside, based on Goldman's price targets. Here's a closer look at fundamentals.

5. Hornbeck Offshore Services (HOS) is an offshore drilling services company, providing offshore supply vessels, multi-purpose support vessels and on-shore logistics services. Its stock has gained 21% in the past 12 months, but has fallen 11% in the past four weeks. The company posted a first-quarter loss of 34 cents a share, missing Goldman's target for a 12-cent loss and disappointing investors. Underutilization of the multi-purpose fleet hampered results. Despite lowering its 2011 earnings and EBITDA forecast, Goldman is still exceptionally bullish on Hornbeck's shares.

Cutting its outlook to a fiscal-year loss of 68 cents, from its prior forecast of a 21-cent profit, Goldman expects the company to earn $3.42 a share by 2013, higher than its previous estimate. Goldman calls the recent sell-off "an attractive buying opportunity" and noted that its call was "never based on a quick snap-back in activity," but a longer-term production rebound.

Goldman expects a strong turnaround in offshore drilling in the Gulf and forecasts 25 rigs will be working in the region by mid-2012, bringing Hornbeck's EBITDA to $242 million. Goldman expects the stock to rise 40% to $36 during the next six months, a short investment horizon.

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