With crude oil prices at about half of their 2008 highs and only a few dollars off their lowest levels of 2010, you may not think that energy stocks are a great investment. Crude oil behemoth Exxon Mobil ( XOM) is off about 10% so far in 2010. European oil stock leader Total ( TOT) is down 23% since January. And Dow component Chevron ( CVX) is barely keeping pace with the market. But a small group of small-cap energy stocks are really hitting their stride. These penny stocks trade for just a dollar or two a share and are very affordable. They also offer explosive profit potential that penny stock investors are used to. Here are five energy penny stocks to consider.
Sinoenergy ( SNEN) produces customized pressure containers and compressed natural gas (CNG) facilities. This energy company also constructs CNG stations for its third-party clients. Thus far in 2010, this penny stock is up 0.5%, similar to the broader markets which have seen comparable gains. However, over the past 12 months, SNEN has jumped an impressive 42.3%. The major jump occurred in Oct. 2009 after Sinoenergy signed a merger agreement with Skywide Capital Management. In its last income statement, SNEN reported a net profit margin of 21.5%, another reason this penny stock is a buy.
Samson Oil & Gas (SSN)
Based in Australia, Samson Oil & Gas ( SSN) is engaged in oil and gas exploration in Australia as well as the U.S. Since January, SSN has seen an incredible gain of 433%, compared to small gains by the broader markets. At the beginning of 2010, the stock was trading around a quarter, and is now up to $1.29 as of this writing. Based on its affordable stock price and its recent stock surge, Samson Oil & Gas is an energy penny stock worth buying.
Lucas Energy (LEI)
Lucas Energy ( LEI) is an independent oil and gas company. Based in Houston, LEI covers approximately 12,500 acres of oil and gas leases in Southern Texas. In March, the company reported having 30 wells, which combined for a production nearly 200 barrels per day. Year-to-date, LEI stock has jumped an impressive 149%. LEI is up over $1 from its 52-week low of $0.44, and looks poised for growth based on its 2010 performance.
RAM Energy Resources (RAME)
RAM Energy Resources ( RAME) is another independent oil and gas company that makes the list. RAM is engaged in the acquisition, development, exploitation, exploration and production of oil and gas in Texas, Louisiana and Oklahoma. This penny stock has watched its stock rise 24.6% over the past 12 months. Consequently, analysts have upped their estimate for RAME this quarter from last year's EPS, creating more hope for shareholders.
Hyperdynamics ( HDY) is yet another Texas-based oil and gas penny stock that makes the grade. Operating in Guinea, HDY has the contractual rights to 80,000 square kilometers in the African country. Since January, the stock has surged 94.3% compared to small gains by the broader markets. With a current stock price of $1.69, the stock has gained $0.82 over the past nine months, and is trading near its 52-week high of $1.98. As of this writing, Louis Navellier did not own a position in any of the stocks named here.