Have you seen the UEC chart lately? In March – May we started accumulating stock, see our post Uranium Is Burning Up The Markets, it’s doing more than just burning up the markets now, I’ve got a whole burning in my pocket with the amazing increases I’ve seen. Here’s what we said about Uranium and UEC:

Uranium companies are hot on our radar – Making a huge spike back into the markets – a large percentage of our Uranium is derived from foreign soil with only a small percentage in the U.S. – local companies are trying to change that. A few U.S. companies that we like:

UEC – is one of them – with a volatile market and positive news out this could be a great buying opportunity.

This proved to be a great opportunity.  And with more good news on the horizon, this just might get better: Uranium Energy Corp Commences Major Drilling Program at Salvo Project in South Texas.

And to make things hotter, check out this PR from Encompass Fund:

The Encompass Fund (ENCPX), www.encompassfund.com, a go-anywhere, open-end mutual fund that posted a 137% return in 2009*, continues to outperform this year. The fund gained 22.14% as of October 31, 2010 to rank in the top 1% in Morningstar’s World Stock Fund category out of 830 mutual funds for the year-to-date period ended October 31, 2010.

Guess who was in their top 5 holdings if you guessed UEC you’d be right.

As of Oct. 31, 2010, the fund’s top five holdings were:

• Avalon Rare Metals (AVL.TO; AVARF.PK)
• Uranium Energy Corp. (UEC)
• Delcath Systems (DCTH)
• Petrodorado Energy (PDQ.V; PTRDF.PK)
• Avion Gold Corp. (AVR.V; AVGCF.PK)

Our favorite stocks to obsess over are energy stocks.  Here is a solid list for you to do some research on.  Read over the due diligence and click on the links to read more about these stocks.

Study after study has shown that stocks with low price-to-earnings multiples significantly outperform high P/E stocks. Research from my favorite investing guru, NYU professor Aswath Damodaran, pegged the outperformance at anywhere from 9% to 12% per year, depending on the study period. That’s big money we’re talking about.

You might be thinking wait a minute… but hold on;

There are 234 energy companies with market caps topping $500 million on major U.S. exchanges. They have an average forward P/E of 26.9. Here are my parameters:

1. In order to stay away from bankruptcy risk, I used Damodaran’s suggestion, and only considered companies with total debt less than 60% of capital.
2. In hopes of capturing a reasonable amount of growth, I looked at Capital IQ’s long-term estimates, and kept only companies expected to grow EPS at 5% annually or better over the next five years. Furthermore, I required at least 5% annualized growth over the past five years.

Expect to see more coverage and research posted to our site in the coming weeks as well as updated videos about market topics that can be viewed on our investment channel. Find out more information about oil stocks and the supporting research.

Of the 44 companies passing the screen, here are the 15 with the lowest forward price-to-earnings multiples:

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