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Kirby ( KEX) provides marine-transportation and diesel-engine services to the marine and power-generation markets in the U.S. It operates the largest fleet of tank barges in the U.S. inland waterways.

The company is benefitting from the domestic oil shale boom as it moves crude oil and petrochemicals on its barges down the Mississippi River to refineries and for distribution. It also ships various types of agricultural commodities.

"It's a very well-run company that has made some recent acquisitions with a number of synergies to them," Hodges said, and barge-fleet usage is at a very high 90%.

"We think they could be an $80 stock in couple of years," Hodge said. "And it should have $5 per share annual earnings power over time," as acquisition synergies kick in.

Kirby's shares are up 30% this year, 50% over the past 12 months and have a five-year average annual return of 13%. It has a market value of $3.2 billion.


Atwood Oceanics ( ATW) is a small contract deep-water oil driller with a fleet of nine rigs, made up of both jack-up and semisubmersible rigs. Much of its work is done internationally.

"We feel there is going to be a big, deep-water drilling-rig shortage by 2013 and when that happens, the day rate (of rig leases) will go way up," said Hodges. "It's hard (for new companies) to get into this business so they will have tremendous pricing power."

He said his firm considers its shares cheap as they are trading at a price of less than 10 times projected earnings.

The stock is up 0.6% this year and 49% over the past 12 months, giving it a $2.6 billion market value. Its average annual return over the past 10 years is an amazing 18%.

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