4. Energy XXI

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YTD Returns: 143%

Bermuda-based Energy XXI ( EXXI) is engaged in the acquisition, development, exploration and production of oil and natural gas reserves in the U.S. Gulf Coast and the Gulf of Mexico.

Energy XXI is among the top picks of fund manager Patrick Gundlach, who manages Marshall Small Cap Growth Fund ( MRSCX).

Reserves and production have soared, Gundlach told TheStreet recently, as management focuses on its core oil assets, combined with some recent acquisitions. Energy XXI in November announced the acquisition of $1 billion in oil and gas assets from Exxon Mobil ( XOM), which will take the company's production from 26,000 barrels of oil equivalent per day to about 46,000.

Gundlach contends this growth will be sustained through its continued focus on core properties, and the effective exploitation of the newly acquired assets.

"Energy XXI's growth stands to improve even more via its exploratory program in the shallow-water-ultra-deep play with McMoRan Exploration ( MMR)," says Gundlach. "Production is slated to commence from the Davy Jones discovery by the end of 2011, and upcoming results from Blackbeard East and Lafitte could also be impactful."

MKM Partners recently upgraded the stock to a buy with a price target of $35.12 out of 16 analysts rate the stock a buy.

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