Big Potential in Small-Cap Oil Stocks

NEW YORK ( TheStreet) -- At the recent "Invest For Kids" conference in Chicago, a lineup of stellar speakers from the world of finance such as Leon Cooperman and Sam Zell touted many blue chips.

Among the well-known favorites mentioned were Boeing ( BA), Hitachi and Mondelez International ( MDLZ). That is why when a Forbes 400 hedge fund manager such as Mark Lasry spoke of Connacher Oil and Gas, a small cap, as one of his favorites, investors should take notice.

Lasry is the billionaire CEO and co-founder of Avenue Capital Group. With over $11 billion in assets, Avenue Capital Group focuses on special situations and distressed debt around the world. Avenue Capital Group is where Chelsea Clinton worked as an analyst.

As detailed in another article on TheStreet, small-cap oil stocks have much more potential upside than do big oil companies such as Exxon Mobil (XOM) and Chevron (CVX). Even with the recent purchase of Exxon Mobil stock by Warren Buffett, it is still one of the worst performing stocks on the Dow Jones Industrial Average. But that is not so for many small-cap oil and gas stocks with great potential such as Connacher Oil and Gas, Octagon 88 and Americas Petrogas.

While Exxon Mobil will likely finish up on the year as a "Dog of the Dow," the performance of small-cap oil stocks has been much better. Octagon 88, now just under $7 a share, was around $5 in early August. Americas Petrogas is near $1.50 after being around 95 cents in mid-September.

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