Whether you see them or not, energy businesses play a crucial part in our daily activities, from powering our homes and businesses to powering our transportation and industries.But they are at the whim of volatile macroeconomic factors that influence capital spending (like interest rates and commodity prices), and the industry has underperformed the market over the past six months as its 11% return lagged the S&P 500 by 2.1 percentage points.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. On that note, here is one resilient energy stock at the top of our wish list and two best left ignored.
Two Energy Stocks to Sell:
Borr Drilling (BORR)
Market Cap: $1.27 billion
Operating one of the world's youngest jack-up fleets with an average age under eight years, Borr Drilling (NYSE:BORR) operates jack-up rigs that drill oil and gas wells in shallow waters up to 400 feet deep for exploration and production companies.
Why Are We Hesitant About BORR?
- Cash-burning history makes us doubt the long-term viability of its business model
Borr Drilling trades at a stock price of $4.15. Check out our free in-depth research report to learn more about why BORR doesn’t pass our bar.
Clean Energy Fuels (CLNE)
Market Cap: $383.6 million
Operating the largest network of natural gas fueling stations in North America with over 600 locations, Clean Energy Fuels (NASDAQ:CLNE) supplies renewable natural gas and conventional natural gas as fuel for commercial vehicle fleets.
Why Do We Think CLNE Will Underperform?
- Modest revenue base of $442.4 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 26.8%
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 2.3% for the last five years
Clean Energy Fuels is trading at $1.74 per share, or 7.1x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than CLNE.
One Energy Stock to Buy:
Talos Energy (TALO)
Market Cap: $2.59 billion
Operating its own deepwater production facilities with names like Tarantula, Pompano, and Brutus, Talos Energy (NYSE:TALO) explores for and produces oil and natural gas from offshore wells in the Gulf of Mexico and offshore Mexico.
Why Will TALO Outperform?
- Annual revenue growth of 20.3% over the last nine years was superb and indicates its market share increased during this cycle
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 72.5%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $15.68 per share, Talos Energy trades at 15.4x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.