Energy shares have climbed out of investors’ doghouse yet again, granted a longer leash out of fear more than optimism.

Vladimir Putin’s invasion of Crimea has stoked supply jitters amid concerns that Russian gas exports to Europe could fall victim to sanctions brinksmanship and conflict with Ukraine. These tensions have for the moment offset the highest Iraqi exports in decades, the ongoing US shale boom and the unmistakable slowdown in Chinese growth.

The markets still haven’t reckoned with the likelihood that Iran, Venezuela and Libya will look to revive sagging exports down the road. For the moment, these political hot spots don’t have the means to so much as nudge the supply/demand balance, leaving the Saudis in charge as the only major exporter with significant spare capacity. 

The Russian invasion of Ukraine is not the only distant misfortune profiting energy equities. They’ve also become the beneficiaries of sector rotation by US investors. With formerly hot growth sectors such as biotechs and Internet stocks under selling pressure, value stocks have become the new focus of bull market leadership. Energy stocks, of course, gravitate toward the value end of the spectrum. Their relatively low earnings multiples look that much more attractive to the investors who believe high oil prices are here to stay given the rising cost of marginal production.

That faith is likely to be seriously tested at some future point should  supply growth swamp demand. Fortunately for all of us, this much discussed scenario remains entirely hypothetical at the moment.

Still, getting let out of the doghouse is not the same as getting tossed a juicy bone. The Energy Select Sector SPDR (NYSE: XLE) remains down 1 percent year-to-date, the worst performing major market sector after the cyclicals. The S&P 500 is up 1 percent so far in 2014. (All numbers in this story through March 25.)

Given a stalled stock market and a laggard energy sector, we can’t get too upset that our portfolio holdings have gained 1.8 percent on average year-to-date (or since our recommendation for those introduced this year.)

And we’re downright pleased to note that the 12 Best Buys we listed on Jan. 9 are up an average of 7.6 percent year-to-date, with only two in the red and six delivering returns well into double digits.

The biggest 2014 windfall within this group so far belongs to First Solar (Nasdaq: FSLR), up nearly 32 percent largely on the strength of last week’s bullish long-term forecast (and the impressive  technical progress as well, as reported in The Energy Letter Monday.) But First Solar isn’t a Best Buy any more, not after we recommended that subscribers who’ve nearly doubled their money since Aug. 28 sell half of their initial position.

So this is as good a time as any to update and renew our best ideas list, this time ranking the picks based on the priority they merit when it comes to investing additional money.

Exiting the stage to considerably less applause than First Solar will be Seadrill (NYSE:SDRL), one of the two best Buy losers year-to-date. We continue to believe in this long-term portfolio winner, and see big upside from the current depressed levels. But it’s also true that Seadrill’s generous dividend consumes the bulk of its cash flow, and would be at risk should the current downturn in demand for deepwater rigs drag on into 2016. The downside and high debt leverage make SDRL a good buy rather than a Best Buy at this time.

Joining the list in their stead are four new names, including a longtime Conservative Portfolio mainstay and three recent recommendations. May these work out as well as the holdovers on the list have lately. And now, the envelope, please:

1. Chicago Bridge & Iron (NYSE: CBI)

The leading energy infrastructure builder began a major pullback two weeks after headlining January’s list but, as predicted near the bottom of that slide, this proved to be a buying opportunity. CBI’s expertise in liquefied natural gas projects leaves it uniquely positioned to profit from the LNG export terminal construction boom in the US and overseas, and the company is also heavily  involved in nuclear plant construction in the US and, increasingly, in China. The spread of shale drilling abroad is likely to multiply the infrastructure opportunities. CBI has returned 45 percent since we recommended it a year ago this week. We’re increasing our buy maximum to $94.

2. EOG Resources (NYSE: EOG)

The biggest and arguably most successful US shale driller was going through a consolidation early in the year, but is now back at new highs following another quarter of spectacular returns from its leading position in the Eagle Ford and a sizable stake in the Bakken. The stock is up 183 percent in the not quite five years since we first               recommended it, 69 percent over the last 12 months and 14 percent year-to-date, yet remains inexpensive at an enterprise value of less than 8 times trailing EBITDA. EOG’s valuation, scale and opportunities figure to make it the target of choice for any oil major seeking a one-stop growth boost. Buy EOG below $200.

The Spoils of Excellence 

3. Carrizo Oil and Gas (Nasdaq: CRZO)

Like EOG, Carrizo continues to generate Eagle Ford windfalls while proving out acreage in the play’s sweet spot. Last month the company reported a 31 percent year-over-year production boost adjusted for the disposal of gas wells in the Barnett Shale, and crude output topped the upper end of guidance despite weather disruptions. Carrizo also retains potentially lucrative Utica acreage that figures to get revalued upwards if neighboring wells continue to exceed expectations. Shares are up 16.7 percent year-to-date and 30.8 percent since joining the Aggressive Portfolio on Dec. 11. We’ll revisit the target if and when it’s exceeded, but for now buy CRZO below $54.

4. Devon Energy (NYSE: DVN)

Devon has played the tortoise to the shale drilling hares, divesting its international operations three years ago and then sitting patiently on the proceeds before shelling out $6 billion for GeoSouthern’s 82,000 net acres in the Eagle Ford. Shockingly, it paid less than its own 4.3 times EV/EBITDA for this prize, while getting a significantly richer valuation in the disposal of conventional Canadian gas assets and the contribution of its midstream operations to a new master limited partnership. Devon is now positioned for a profitability boost from oil production expected to grow at least 20 percent annually, while retaining significant upside exposure to higher natural gas prices. Shares are up 3.7 percent year-to-date and have returned more than 8 percent since joining the Growth Portfolio on Sept. 25. Buy DVN below $67.

5. EQT (NYSE: EQT)

The leading Marcellus driller continues to deliver rapid revenue and profit growth, boosted by the high natural gas liquids content of its output from the play’s liquids sweet spot. Production is forecast to increase 24 percent this year after a 40 percent jump in 2013, and the company’s unit production costs are among the lowest.  The stock is up more than 10 percent year-to-date and has returned more than 45 percent since the April 24 recommendation. Buy EQT below $110.

6. ConocoPhillips (NYSE: COP)

We added the large and cheap driller to the Conservative Portfolio on Feb. 13, and the return exceeds 4 percent to this point. After disposing of its downstream assets ConocoPhillips has a better growth and returns profile than the super-majors, along with greater exposure to domestic shale basins and the development of Canadian oil sands. It’s valued at all of 4.5 times trailing EBITDA based on enterprise value, while financing largely from operations the investments needed to meet its goal of growing 2014 output 3 to 5 percent. Operating margins exceed EOG’s. Buy COP below $73. 

7. Enterprise Products Partners (NYSE: EPD)

The leading master limited partnership is also among the most financially conservative, financing its accelerating investment in NGL processing in part out of retained cash flow. This conservatism should pay ample dividends down the road as Enterprise ramps up exports of liquefied petroleum gas.  The 4 percent yield is as secure as they come and there are no incentive distribution rights to skim off the fast-growing cash profits. The unit price is up 4.5 percent year-to-date, boosting our total return to 340 percent over nine years. Buy EPD below the increased maximum of $75.   

8.  Energy Transfer Equity (NYSE: ETE)

Unlike rival Enterprise, Energy Transfer Equity has not dispensed with incentive distribution rights. Fortunately, it’s the general partner, meaning it gets to collect this tribute from affiliates Energy Transfer Partners (NYSE: ETP), Regency Energy Partners (NYSE: RGP) and Sunoco Logistics (NYSE: SXL). ETE will also benefit directly from sponsorship of a large LNG export terminal it has been authorized to build in Louisiana, under guaranteed long-term contracts that shield it from most of the project’s risks. The marketing of another MLP affiliate that will actually hold the LNG assets in the fall could serve as a further catalyst. The unit price is up 2 percent since we recommended the MLP two weeks ago, and the total return over the last 12 months is up to 69 percent. Yet the LNG project and acquisitions by affiliates could push the price much higher. Buy ETE below $52.  

9. Schlumberger (NYSE: SLB)

The leading oilfield services supplier has been running circles around the competition for years, yet keeps finding ways to increase its industry-leading margins even as it expands its market share. Given its strong global diversification, Schlumberger figures to become a major player in exporting US shale drilling techniques overseas and, eventually, in rebuilding the oil industries of Venezuela and Iran. Shares are up 6.5 percent year-to-date and have returned more than 31 percent over the last 12 months. Buy SLB below $100.

10. Cabot Oil & Gas (NYSE: COG)

The leading driller in the dry-gas Marcellus sweet spot of northeast Pennsylvania has been the single biggest drag on our Best Buys, dropping 15.8 percent year-to-date following a disappointing production outlook. But the fundamental case remains as strong as ever with operating costs in EQT’s league, the infrastructure constraints discounting Cabot’s output set to diminish greatly in the next two years and the company financing rapid output gains out of operating cash flow, with enough left over for a new share buyback. The move to pad drilling that will hold up production growth in the short term should pay off handsomely in the second half of the year. Our faith in Cabot is not diminished by the fact that its returns since our March 13, 2013 recommendation are currently down to zilch. Buy COG below $42.50.     

11. Targa Resources (NYSE: TRGP)

This is an NGL gatherer and processor like Enterprise, and while Targa lacks its rival’s scale and immense financial flexibility it does offer much faster dividend growth, aiming for a 25 percent increase this year after delivering more than 30 percent in 2013. The company collects incentive distribution rights from the affiliated MLP, and its export terminal on the Houston Ship Channel remains underappreciated as a strategic asset. Shares are up 11.7 percent since the Jan. 9 recommendation. Buy TRGP below $105

12. Sunoco Logistics (NYSE: SXL)

The oil, NGL and refined products pipeline operator is an MLP stressing rapid distribution growth, in its case 22 percent annually last year, in 2014 and likely into next year at least. Sunoco is capitalizing on the energy production booms in West Texas and the Northeast by offering scarce shipping capacity from those regions to the refining and processing hubs elsewhere. Its distribution is, like EPD’s, covered by plenty of retained cash flow, though over the longer term growth will be dampened by Sunoco’s growing incentive payments to its general partner. But over the next few years business fundamentals and the potential for further appreciation look strong. Buy SXL below the increased maximum of $91.      

13. Jones Energy (NYSE: JONE)

The small-cap oil and gas producer in the minor Cleveland play below the Texas panhandle has traded disappointingly weakly, losing nearly 20 percent since we recommended it six weeks ago. But cash flow doesn’t lie, and Jones is generating enough of it to finance most of the spending needed to boost this year’s production 30 percent, as it has promised. Management is experienced, respected and heavily invested, the stock is thinly traded and underfollowed and the valuation makes Conoco and Devon look expensive. This one is a best buy because of limited downside and strong potential for long-term appreciation. Buy JONE below $21. 

14. Williams (NYSE: WMB)

The gatherer, processor and pipeline operator across vast swaths of the Northeast and the Gulf Coast is another rapidly expanding player capitalizing on the domestic shale boom. Its cash flow will get a big boost once an olefins plant damaged in an explosion last year restarts this summer, and Williams also collects generous and growing incentive payments from two affiliated master limited partnerships, including one for which it is the sole sponsor. Two hedge funds recently granted seats on the board of directors are likely to press for accelerated returns over and above the company’s promise to increase its dividend 20 percent this year and again in 2015. Shares are up 6.8 percent year-to-date and have returned 18.3 percent since our Oct. 9 recommendation. Buy WMB below $46.

Portfolio Notes

The Aggressive Portfolio has not seen its aggression rewarded so far in 2014, with its 17 holdings down 2.1 percent on average. The performance would look even worse without GasLog’s (NYSE: GLOG) 41.6 surge year-to-date as the LNG fleet operator proceeds with plans to spin off an MLP. Carrizo has also been a big help, while Fuel Systems Solutions (Nasdaq: FSYS) and Gastar (NYSE: GST) have hurt the most. Gastar has coughed up the bulk of its big prior rally, but remains up more than 5 percent since the Dec. 11 recommendation.

In contrast, the 24 components of the Grow Portfolio have gained a relatively strong 4.4 percent on average so far in 2014. Until First Solar’s surge last week, land rig supplier Helmerich & Payne (NYSE: HP) had led the way. It’s up 28.2 percent year-to-date on booming demand for its most advanced machines, which fetch premium rates because they’re better and more efficient at drilling long horizontal wells, saving drillers time and money. Only six Growth holdings are down on the year, none more than Cabot.

Last but not least the Conservative Portfolio clings to an average gain of 2 percent year-to-date before dividends and other distributions. EQT’s sponsored MLP EQT Midstream (NYSE: EQM) has the greenest lawn in this neighborhood with a 17.2 percent year-to-date gain; Sunoco is running a close second. Kinder Morgan (NYSE: KMI) is down 11.2 percent year-to-date, dogged by criticism over slowing growth and the allegedly aggressive accounting. You can’t win them all, but founder Richard Kinder has been winning on investors’ behalf for decades now, and this is another instance where patience should pay off in the end.