Three Energy Penny Stocks Surging with Potential

penny stocksPenny stock investing: The world needs to invest some $48 trillion in energy through 2035 just to meet mounting global demand, according to a new study from the International Energy Agency (IEA).

In its World Energy Outlook series released Tuesday, the IEA said the current $1.6 trillion annual investment in energy must rise steadily over the coming decades to $2 trillion annually.

"The reliability and sustainability of our future energy system depends on investment," said IEA Executive Director Maria van der Hoeven.

The data also showed that annual investment in new fuel and electricity supply has more than doubled since 2000. Investment in renewable sources of energy, meanwhile, has quadrupled over the period - thanks in large part to government incentives.

What the report means for investors is clear: Lucrative opportunities await in the energy sector.

That's why we've highlighted three low-priced penny stocks that tap into energy's staggering profit-generating potential...

Three Energy Penny Stocks About to Soar

Constellation Energy Partners LLC (NYSE Arca: CEP) focuses on the exploration, development, and production of oil and natural gas properties, as well as midstream assets, in the United States. The Houston, Texas-based company's proved reserves are located in Oklahoma, Kansas, Texas, and Louisiana. As of Dec. 31, 2013, CEP had 1,995 net-producing wells.

In May, CEP posted an average net production of 4,131 barrels of energy per day for the quarter - an 11% increase year over year (YOY). Net oil and liquids production for Q1 2014 reached 907 barrels per day (bpd), up 24% from the prior quarter, and up 71% YOY. The company also reported last month it acquired producing assets in LaSalle Parish, La. Following the robust quarter, CEP President and Chief Executive Officer Stephen R. Brunner said the company looks forward to further building on the company's increasing momentum, "always with an eye toward returning value to our unit holders."

Of the six analysts who cover Constellation, one rates shares "Buy," one "Outperform," one "Equal Weight," two have a "Hold" rating on shares, and one rates CEP "Underweight," according to Thomson/First Call. Over the last 12 months, shares have traded between $1.79 and $3.20. Shares currently trade around $2.43.

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Hercules Offshore Inc. (Nasdaq: HERO) provides shallow-water drilling and marine services to the global oil and natural gas exploration industry. Its services comprise oil and gas exploration, development drilling, well services, platform inspection, and maintenance. As of February, Hercules owned a fleet of 38 jackup rigs and 19 liftboat vessels, and it operated five liftboats owned by a third party.

The Houston, Texas-based company just inked a five-year, $420 million drilling agreement with the United Kingdom's Maersk Oil North Sea Ltd. The deal requires Hercules to deploy a rig to develop Maersk's Culzean Field in the Central North Sea. Hercules' management believes the drilling contract provides an opportunity for it to expand operations in that region. Moreover, the company expects demand for the rig to exceed the initial five-year contract.

According to Thomson/First Call, four analysts rate this penny stock "Buy," one "Outperform," one "Market Perform," one "Hold," and two "Neutral." The median price target is $6, with a high target of $10. Shares currently trade at $4.51 per share.

Yingli Green Energy Holding Co. Ltd. (NYSE ADR: YGE) designs, develops, manufactures, markets, sells, and installs photovoltaic products in China, the United States, and throughout Europe. (Photovoltaics is a method of generating electrical power by converting solar radiation into direct current electricity by using semiconductors.)

While the U.S. Department of Commerce is mulling tightening restrictions against Chinese solar panel imports, demand in Yingli's homeland is what's truly important. You see, China's use of solar power to meet antipollution goals matters more than trade tensions. Indeed, China's new installation of solar panels in 2013 amounted to 13 gigawatts (GW) - one-third of the global tally. That figure was more than twice 2012's level, according to the European Photovoltaic Industry Association. The number also crushed the U.S. total of 4.8 GW. Moreover, the trend is expected to continue. Last month, Beijing announced a capacity target for 2017 of 70 GW, up from 21.6 GW in 2013.

Of the 10 analysts who cover YGE, three rate shares "Buy," one "Outperform," one "Perform," four "Hold," and one "Neutral," according to Thomson/First Call. The median price target is $6, with a high target of $9. At last check, this penny stock was trading at $2.86 per share.

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