Three of the top buys last week of the best-performing 100 investors at Marketocracy.com were energy companies. One was a refiner, one an oil and gas driller, and one an oilfield machinery company. All are trading at highs, but the gurus think the stocks will move even higher.

Crude oil prices slipped more than one per cent last week. While still in the middle of their 52-week range, front-month oil futures are down nearly nine per cent from a year ago, now trading in the mid-60s.

Nevertheless, most energy stocks are up during that time. The Energy Select SPDR is trading near its 52-week high, which it set this month. One reason is that while oil prices have fallen, natural gas prices have risen, up 27 per cent over the past year.

Many energy companies derive sales and earnings from both, so high natural gas prices have kept their finances healthy. Another reason is that the gasoline that consumers buy at the pump has been hitting new highs. That bodes well for refiners, and perhaps also for oil drillers and their entourage of services companies.

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Frontier Oil of Houston runs refineries in Wyoming and Kansas, and its biggest customer is Shell Oil Products US. Along with gasoline prices, Frontier's price-to-earnings ratio has crept up in 2007 from a two-year low near 8 to its current 11, which is closer to but slightly lower than its long-term average valuation. And the company is efficient, as its EBITDA (earnings before interest, taxes, depreciation and amortization) margin has been growing steadily for the past five years and is now near 14 per cent.

What the gurus are cluing in on with this buy is that high gasoline prices might make for a healthy upside surprise for Frontier: Analysts expect the company to have a double-digit earnings decline in 2008, amid longer-term growth of 6 per cent, but in the past month more than half of those analysts have revised their 2008 numbers higher. Gurus nearly doubled their holdings, which now put the stock at the 112th biggest holding in their combined portfolios.

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Gurus also poured money into Denver-based Kodiak Oil & Gas, pushing it to their top 250 holdings. The $546 million (market cap) company had its first meaningful revenues in 2006, when it sold $4.2 million worth of oil and gas. The stock trades at 115 times trailing 12-month sales and five times book value. Without analyst coverage, it's hard to say whether these valuations are justified by expected growth, but the M100 certainly think so.

Another energy buy was Houston-based Grant Prideco, which makes oil drills. The stock's up 22 per cent in the past year, but it still trades at a price-to-earnings ratio of 14.5, which is toward the low end of its historical range and 18 per cent lower than its industry average. Plus, analysts expect 20 per cent annual growth over the long term. This was a big new buy for the gurus, who added enough shares last week to put it inside their top 500 positions.

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Alongside the Grant Prideco buy, gurus sold another Houston energy company, oilfield services company BJ Services. The company provides pressure pumping services for oil wells, so it's not a direct competitor to Grant Prideco, but the sell was for almost an equal value to the Prideco buy.

It's possible it was a direct portfolio substitution. Unlike the buys, this hasn't been a good 52-week run for BJ, which is down 17 per cent. It trades at just 10.6 times earnings, and analysts expect 21 per cent annual growth over the long term. But gurus were unhappy with its performance. The company has missed its last two quarterly earnings numbers, and gurus sold off all of their holdings.

Other guru sell-offs last week included restaurant chain Applebee's International and East West Bancorp.