He's an even bigger fan of Cimarex Energy (XEC). with a market cap of $5.2 billion. About 70% of its production is natural gas. Analysts expect Cimarex to earn $8.22 a share this year and $7.43 a share next year. The stock trades at 62, or 7.5 times this year's earnings. Debt is just 12% of capital. Given this strong balance sheet, Cimarex can be "almost completely unhedged," meaning rising gas prices buoy earnings. Evans figures Cimarex's enterprise value is just 3 to 3.5 times Ebitda, versus 6 to 10 times for peers. The shares are so cheap because the company underestimated its drilling budget and overestimated production early last year, underwhelming investors. That's changed: "The company is on track to deliver high single-digit production growth," he says.

Cimarex Energy ()

Cimarex (XEC) was upgraded at UBS. Rating raised to Buy from Neutral. Price target raised to $68 from $45. 2008 EPS estimates raised to $15.07 from $12.25.

Time to Fill Up on Cimarex, Dow Chemical
Will Nasgovitz, portfolio manager of the Heartland Select Value Fund, says small - and mid-caps will snap back first, especially energy providers like Cimarex.

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Downgraded by UBS from Buy to Neutral

6.3%

a natural gas leader

agressive acuisitions

own it

Energy will rise.