SandRidge Energy ( SD) is an independent oil and natural gas company with operations in the Permian Basin and Mid-Continent region of the central U.S. The company has been increasing its capital expenditures significantly and is increasing its borrowings, Hodges said. Investors haven't liked that, causing its stock to plummet 27% over the past three months. SandRidge is aggressive. It acquired significant oil shale acreage a few years ago for $100 million and just sold 10% of it for $500 million to South Korean investors, which will help fund new drilling programs, said Hodges. "I think analysts have been getting this wrong (with their mostly negative ratings) and don't understand what they're doing," Hodges said. "They were natural-gas drillers a few years ago and now its 80% oil, which is much more lucrative. And this is a company with one of best executives in the business running it" in Tom Ward. SandRidge's share performance has been volatile. The stock has risen 2.9% this year and 53% over the past 12 months. The company has a market value of $3 billion. >>To see these stocks in action, visit the 7 Top-Performing Stocks From the No. 1 Small-Cap Fund portfolio on Stockpickr.