7 Little-Known Energy Picks From the Pros

(TheStreet) -- Energy stocks, some of which lagged behind technology shares and other industries last year, are the best performers of 2011, rising an average of 9.4%, more than twice that of the benchmark S&P 500 Index. Almost all of the top dozen or so mutual funds ranked by returns at research firm Morningstar have an energy-industry bias and, in particular, an energy-services component. While gold and mining shares were fund-manager darlings last year, so far in 2011, the smart money is on energy as global economic growth accelerates. The leaders for the three months through Feb. 2 are the ProFunds Oil Equipment and Services and Distribution Fund (OEPIX), up 43%, and a sister fund, ProFunds UltraSector Oil & Gas (ENPIX), up 37%. Big mutual funds of all stripes are eager to get an oil-field-services industry stake, but they usually go for the leaders, including Schlumberger SLB and Halliburton HAL. Daniel Rice, manager of the $1.5 billion Black Rock Energy & Resources Fund (SSGRX), told Bloomberg News in an interview a month ago that he expects an expanding global economy to push oil prices above $100 a barrel this year and, as a result, shares of oil and gas companies may rise 25% to 30% while coal stocks could double. One way for conservative investors to play the commodities market is to invest in the industries' service providers. In oil and gas, that means companies that make and supply equipment such as oil rigs, exploration services or the new technologies that makes the big-company guys' jobs easier. Some investors are already there, as oil and gas equipment services stocks are building on last year's 37% gain. But there are many interesting stocks under the surface. Here are a few: Continue reading the article.