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TheStreet Open House

7 Top-Rated Energy Stocks With Upside

Stock quotes in this article: CHK, MRO, CVX, GTE, AAV, DNR, HAL

NEW YORK ( TheStreet) -- Chesapeake Energy (CHK), Marathon Oil Corporation (MRO), Chevron (CVX), Gran Tierra Energy (GTE), Advantage Oil & Gas (AAV), Halliburton (HAL) and Denbury Resources (DNR) are attractive and are positioning for long-term appreciation.

These stocks outperformed the Dow in the last month, gaining 13% vs. the Dow's 7.5% increase. Besides, they could generate a mean return of 40% over the next year and, according to a Bloomberg consensus, have average buy ratings of 74%. We list these stocks in ascending order of buy ratings, with Halliburton leading the pack, having 89% buy ratings from the covering analysts.


7. Chesapeake Energy is an Oklahoma-based energy player developing unconventional natural gas and oilfields onshore in the U.S.

Net income for the second quarter was $510 million, up from $255 million in the same period last year. Increased profitability resulted from higher operating income that doubled to $985 million from the corresponding quarter of 2010. Revenue grew 50% during this period to $3.3 billion.

For the second quarter of 2011, the company reported average daily production of 3.049 billion cubic equivalent of natural gas, a 9% increase year-over-year, but down 2% sequentially following the sale of its assets in Fayetteville Shale.

Oil price inflation and the proposed drilling program in the Utica Shale have amplified the company's capital expenditure for fiscal 2011 and 2012 by $500 million, to $6.5 billion each year. Recently, Sterne Agee initiated a buy on the stock. Analysts expect the stock to deliver 34% upside over the next year. With 58% buy ratings, the stock is trading at 9.9 times its estimated 2011 earnings.

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