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3. Abraxas Petroleum ( AXAS)

Company Profile: Abraxas Petroleum is an independent energy company, developing and producing oil and gas in the U.S. from the Rock Mountain, Permian Basin and Gulf Coast regions.

Share Price: $3.23 (June 27)

Stock Performance This Year: -29%

Analyst Consensus: Wall Street gives Abraxas strong marks, with nine analysts rating the stock a "buy," including those at Stifel Nicolaus and R.W. Baird. The only other firm following the stock, EVA Dimensions, has a "sell" rating on Abraxas. The average price target of $6.18 implies 91% upside potential.

Bullish Case: C.K. Cooper & Co. analyst Joel Musante upgraded shares of Abraxas to "buy" from "hold" on May 16, as the stock has fallen to an attractive level compared with his price target of $5.50. Musante notes that Abraxas may experience some challenges that negatively impact production growth, but he also highlights the company's oil development projects in the Bakken, Niobrara/Turner Sandstone in Wyoming and the Permian Basin of West Texas.

TheStreet Ratings has a "hold" on the stock, arguing that the company's "solid stock price performance, expanding profit margins and notable return on equity" are countered by "deteriorating net income, generally poor debt management and weak operating cash flow."

2. DryShips ( DRYS)

Company Profile: DryShips, based in Greece, is a dry-bulk transportation company. DryShips also owns ultra-deep-water drillships and oil-tanker vessels.

Share Price: $3.96 (June 27)

Stock Performance This Year: -28%

Analyst Consensus: DryShips garners a whopping 10 "buy" ratings from Wall Street analysts, including those at Sterne Agee, Wells Fargo Securities and Cantor Fitzgerald. Five other analysts say investors are better off holding on to shares, and two more have a "sell" rating on DryShips. The average price target of $5.93 implies nearly 50% upside from where the stock currently trades.

Bullish Case: In a June 27 research note, Sterne Agee analyst Salvatore Vitale wrote that DryShips' plan to list drilling contractor Ocean Rig on the Nasdaq this summer "will be a catalyst to unlock the value of the Ocean Rig business. Our valuation for DRYS is based on our sum-of-the-parts analysis, which yields a $6 price target."

On the other hand, TheStreet Ratings has a "sell" rating on DryShips, due to "disappointing historical performance in the stock itself and generally weak debt management."

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