Patience is a virtue. My Buy rating issued on May 27, 2009 for independent oil/natural gas company Devon Energy (NYSE: DVN) at $60.89 was, from one perspective, a tad late.

But the reason for the late entry was technical: although DVN's fundamentals were and are solid, the Buy rating was delayed because DVN was struggling with both the $50 level and the 50-day moving average earlier in the spring. Concerning the $50 level, it's a psychological level that can create resistance.

Given oil's recent run-up, at times it appears that all oil/natural gas plays have been bid-up, but Devon Energy (NYSE: DVN) hasn't and it's worth a review.

Devon's shares were rudely treated by the Street from mid-2008 to early-2009, following the collapse in oil prices. Some of it was justified, due to the large, likely decline in FY 2009 revenue stemming from crude's price collapse. But valuing DVN with a p/e of 6 or 7 is a tad low, given the company's assets, hence the Buy rating that has been generated here.

If you've been watching earnings this past week, or if you read last week's Week in Preview, then this coming week may leave you feeling a bit like Bill Murray in Groundhog's Day. That is, again analysts surveyed by Thomson Reuters expect earnings declines to be more frequent and deeper than earnings gains.

Motorola Inc. (NYSE: MOT), Dow Chemical Co. (NYSE: DOW), Anadarko Petroleum Corp. (NYSE: APC), IAC Interactivecorp (NASDAQ: IACI), Moody's Corp. (NYSE: MCO), Elizabeth Arden Inc. (NASDAQ: RDEN), Devon Energy Corp. (NYSE: DVN), Diebold Inc. (NYSE: DBD), Tyco International Ltd. (NYSE: TYC), United Parcel Service (NYSE: UPS), Cisco Systems Inc. (NASDAQ: CSCO), Polo Ralph Lauren Corp. (NYSE: RL), ITT Corp. (NYSE: ITT), and Walt Disney Co. (NYSE: DIS) are scheduled to report quarterly results this week, and they're all expected to report double-digit declines in earnings.

But again this week, let's take a look who Wall Street feels may have done well in the past quarter.

Back in July, as oil approached its zenith, I cautioned that the bubble in energy stocks was beginning to resemble previous bubbles, such as the ones that sent semiconductor stocks to the moon in 1999 and 2000, and homebuilding stocks in 2005.

At a time when others were buying anything associated with oil, I suggested that investors take profits instead.

In August I wrote about oil and gas exploration firm Devon Energy (NYSE: DVN). The company had just announced quarterly results, which were ahead of estimates, and its shares soared that day to $91 per share.

I made the incredibly astute prediction that there were only two directions for the stock to go: up or down. Basically I stated that if your opinion was that oil demand will continue to outstrip supply, buying Devon made sense.

My own personal belief was that oil was trading at speculative levels, demand destruction would occur in short order with $4-per-gallon gasoline, we'd begin conserving and our massive investments in alternative energy would eventually result in supply outstripping demand.

Even without demand destruction fundamentals suggesting that the price per barrel of oil should have been well below $100, Devon was a stock to sell in my opinion. In fact, the article was titled "Avoid Devon Energy Like the Plague."

Fast forward to today. Oil collapsed beyond what I had even expected and Devon shares fell in parallel. At its lows, DVN hit $54 and change.

The focus of last week's preview was on oil and energy companies, and we saw that big oil had a good week, reporting better-than-expected results and record profits driven by high prices in the third quarter. Energy-related companies are well represented again this week and expectations in general remain high.

Early in the week, analysts surveyed by Thomson Financial anticipate that the big earnings gainers will include EOG Resources Inc. (NYSE: EOG), Anadarko Petroleum Corp. (NYSE: APC), and Cimarex Energy Co. (NYSE: XEC), which are expected to post profits of $2.24 per share (up 64.7% from a year ago), $1.48 per share (up 52.7%) and $2.26 per share (up 61.1%) respectively. All three of them have offered positive surprises in recent quarters, and analysts on average recommend buying EOG and Anadarko. Other expected big earnings gainers early in the week include Forest Oil Corp. (NYSE: FST), Pioneer Natural Resources Co. (NYSE: PXD), Comstock Resources Inc. (NYSE: CRK), and MasterCard Inc. (NYSE: MA). The earnings of phosphates producer Innophos Holdings Inc. (NASDAQ: IPHS) are expected to have risen 92.3% to $3.37 per share. Innophos beat estimates in the previous quarter by a whopping 210%, and analysts have been impressed with Innophos's lack of debt and pricing gains despite the slowing economy, so, on average, they recommend buying IPHS.

Also early in the week, analysts expect Goodyear Tire & Rubber Co. (NYSE: GT), Kaiser Aluminum Corp. (NASDAQ: KALU), and Oshkosh Corp. (NYSE: OSK) to report that their profits fell 52.9% to $0.33 per share, 45.1% to $0.67 per share, and 41.2% to $0.67 per share, respectively. These companies have tended to beat estimates in recent quarters, and the consensus recommendations of analysts are to buy them. However, PMI Group Inc. (NYSE: PMI), one of the largest private mortgage insurance providers in the U.S., is expected to take another hit as the housing slump drags on. The California-based company is expected to have widened its net loss from $1.04 per share a year ago to $2.43 per share in the most recent quarter. Its shares are down 84.5% from a year ago, and have been trading recently near their 52-week low.

John W. Nichols, who is the co-founder of Devon Energy (NYSE: DVN), died recently. He was 93.

As should be no surprise, his life provides many lessons for budding entrepreneurs. Interestingly enough, his innovations were not necessarily about creating new products. Instead, he was an innovator of finance.

Nichols started his career as an accountant and audited the financials for oil companies. Leveraging this experience, he started an oil company in 1941. With sky-high income taxes, Nichols structured innovative financial vehicles to minimize the bite from Uncle Sam. For example, he was the first to register a public oil & gas drilling fund with the Securities and Exchange Commission.

And it was a hit -- he attracted large sums of capital from wealthy individuals (even Hollywood stars like Barbara Stanwick).

No doubt, Nichols biggest feat was the creation of Devon. He formed the venture in 1971 with the help of his son, a lawyer.

The financial innovation didn't stop as Nichols developed the so-called royalty fund, which became a standard in the oil industry.

It was also a big spur for growth. After all, Devon is today a $43 billion company.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

With a turn of the calendar page, we drift into the middle portion of the current quarter, but the earnings season rolls on. Among the many companies scheduled to report quarterly results this coming week are Time Warner Inc. (NYSE: TWX), Cisco Systems Inc. (NASDAQ: CSCO), News Corp. (NYSE: NWS), and Whole Foods Market International (NASDAQ: WFMI). Let's take a look at which companies Wall Street analysts are expecting to be among the top earnings gainers and decliners this week.

Analysts surveyed by Thomson Financial expect the following to report strong earnings growth when compared to the same period of the previous year.

• DRS Technologies Inc. (NYSE: DRS): $0.85 EPS (+95.3%) on revenue of $823.8 million (+12.0%)
• Integrys Energy Group Inc. (NYSE: TEG): $0.40 EPS (+70.0%) on revenue of $2.6 billion (+9.7%)
• Cimarex Energy Co. (NYSE: XEC): $2.53 EPS (+64.4%) on revenue of $599.9 million (+75.4%)
• Forest Oil Corp. (NYSE: FST): $1.51 EPS (+55.6%) on revenue of $456.1 million (+79.1%)
• Devon Energy Corp. (NYSE: DVN): $3.28 EPS (+48.5%) on revenue of $4.1 billion (+38.5%)
• CMS Energy Corp. (NYSE: CMS): $0.13 EPS (+46.2%) on revenue of $1.4 billion (+6.7%)
• Transocean Inc. (NYSE: RIG): $3.23 EPS (+43.0%) on revenue of $3.1 billion (+112.9%)
• Sara Lee Corp. (NYSE: SLE): $0.26 EPS (+38.5%) on revenue of $3.5 billion (+8.9%)
• Williams Companies Inc. (NYSE: WMB): $0.69 EPS (+37.7%) on revenue of $3.4 billion (+20.0%)
• Harris Corp. (NYSE: HRS): $0.99 EPS (+28.3%) on revenue of $1.4 billion (+18.0%)

Devon Energy (NYSE: DVN) is an oil/natural gas exploration company, with operations in the U.S., Canada, and abroad.

Readers of this space know that one argument forwarded here is that in the era of elevated energy prices, oil/natural gas companies are likely to remain promising plays for the foreseeable future, baring the discovery of a cheap, widely-available, alternative energy. And among oil/natural gas companies, Devon Energy is worth an evaluation.

Analysts like DVN's sizable proved oil/gas reserves of 2.34 billion barrels of oil equivalent. Production volume should increase 4-5% in 2007 and 7-11% in 2008. Analysts also like Devon's strategy decision to sell international assets with lower growth prospects. Meanwhile, the company's overall costs remain reasonable.

The New York Times reports that nobody knows where the price of oil will go next. It quotes John Richels, president of the Devon Energy Corp. (NYSE: DVN), an international oil and gas company based in Oklahoma City, saying $150 a barrel was possible, but so was $55.

To me, the most interesting part of this forecast is that an executive in the industry has no idea where the price will go. As the Times suggests, this is because the price is determined by traders and hedge funds. And these market participants view U.S. equities, housing, credit and currency markets as shaky. By contrast, they see oil and other commodities as a safe haven.

If the Times is correct, then the price of oil will be determined by the direction of U.S. equities, housing, and currency and whether these traders and hedge funds continue to see oil as a store of value. If you think that housing prices will rise in 2009; that the U.S. economy is in for robust growth and a balancing budget in 2009; and that peace will break out in the Middle East then those traders and hedge funds are likely to sell oil and buy dollars -- dropping the price to Richels' $55.

Otherwise, $150 here we come.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Devon securities.

Oklahoma turns 100 years old this year, and I wrote a bit about its business climate in my recent Investing in Oklahoma post. That post featured some growth companies based in Oklahoma: Arena Resources Inc. (NYSE: ARD), Helmerich & Payne Inc. (NYSE: HP), Unit Corp. (NYSE: UNT), Chesapeake Energy Corp. (NYSE: CHK), ONEOK Inc. (NYSE: OKE), Devon Energy Corp. (NYSE: DVN), and the Williams Companies (NYSE: WMB).

Earlier this year, the Motley Fool also took at look at Oklahoma companies, and focused on some of the same energy sector companies that I did. Its search also included two non-energy companies as well: drive-in burger chain Sonic Corp. (NASDAQ: SONC) for its growth potential, and Tulsa-based Dollar Thrifty Automotive (NYSE: DTG).

Sonic recently announced 21 consecutive years of positive same-store sales performance, and reaffirmed its 33 cents earnings per share earnings expectations for the fourth quarter. For fiscal 2008, Sonic expects earnings growth of 15% to 17%. The consensus of analysts surveyed by Thomson Financial is that Sonic is a buy. The share price was $23.40 at the close on Friday, up from a 52-week low of $20.02 in late July, not yet quite back to its 52-week high of $25.09 in May, but still up from its stumble at the end of August after an analyst's downgrade based on labor and dairy costs. That was before the announcement and reaffirmed expectations mentioned above. Also, Sonic made the Forbes list of 100 best mid cap stocks in America.

Devon Energy Corp. (NYSE: DVN) is an energy company engaged in oil and gas exploration, production and property acquisitions. DVN is recently up $1.08 to $82.87 on unconfirmed and renewed takeover chatter. WTI Crude oil futures are up 1.89% to $81.79, according to Bloomberg. DVN call option volume of 11,277 contracts compares to put volume of 508 contracts. DVN October option implied volatility of 31 is near its 26-week average of 30 according to Track Data, suggesting non-directional price fluctuations.

Gentex Corp. (NASDAQ: GNTX), a designer, developer, manufacturer and marketer of products employing electro-optic technology, is recently up 38 cents to $21.25 on unconfirmed buyout chatter. GNTX has a market cap of $3 billion with zero long term debt. Soleil said on September 7, "GNTX's cash hoard of $521 million or $3.63 per share can be used to pay dividends, repurchase shares, and reinvest in the business." GNTX October 22.5 calls have traded 37 times on transaction volume of 1,281 contracts above its open interest of 43 contracts. GNTX October option implied volatility of 43 is above its 26-week average of 33 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Oklahoma celebrates its centennial in November -- Happy Birthday, Oklahoma!

Today, Oklahoma is known as one of the most business-friendly states, due in part to low tax rates. Oklahoma's economy is based largely on the energy, aviation, and food processing sectors. From 2000 to 2006, Oklahoma's gross domestic product increased 50 percent. The GDP per capita grew almost 10 percent between 2005 and 2006, one of the highest rates in the nation.

Fortune magazine's 2007 list of the fastest growing companies in the U.S. included six from Oklahoma. At number three on the list was Tulsa-based Arena Resources Inc. (NYSE: ARD), a seven-year old oil and gas firm with a three-year annual growth rate of 165 percent. Back in August, Arena announced strong second quarter 2007 financial and operating results. Arena is also a major holding in the Bruce Fund, which recently made the 2007 Forbes Honor Roll.

Tulsa-based oil and gas driller Helmerich & Payne Inc. (NYSE: HP) had a three-year annual growth rate of 37 percent, which beat the S&P 500. In August, H&P announced strong second quarter 2007 results, as well as two new contracts. The Motley Fool sees expansion in other sectors as good news for drillers such as H&P.

MOST NOTEWORTHY: The energy & petroleum sector, BP PLC, BG Group, Check Point and ValueClick were today's noteworthy upgrades:

• Bernstein upgraded Talisman Energy Inc (NYSE: TLM) to Outperform from Market Perform on valuation and potential exploration success in Vietnam and raised Anadarko Petroleum Corporation (NYSE: APC), Devon Energy Corporation (NYSE: DVN) and EOG Resources Inc (NYSE: EOG) to Market Perform from Underperform on improving gas fundamentals.
• Bernstein also upgraded shares of BP PLC (NYSE: BP) and BG Group (NYSE: BRG) to Outperform from Market Perform.
• Check Point Software Technologies (NASDAQ: CHKP) was upgraded to Outperform from Market Perform at Friedman Billings, citing checks that indicate a strong product cycle for the company's beefed up VPN/firewall product portfolio.
• ValueClick (NASDAQ: VCLK) was upgraded at Citigroup to Buy from Hold on valuation, as they believe the recent correction provides a compelling entry point.

OTHER UPGRADES:

• Merrill Lynch upgraded shares of Alcoa Inc (NYSE: AA), Alumina Ltd (NYSE: AWC) and Century Aluminum Company (NASDAQ: CENX) to Buy from Neutral and shares of Southern Copper Corporation (NYSE: PCU) to Neutral from Sell.
• JP Morgan upgraded shares of Tempur Pedic International (NYSE: TPX) to Overweight from Neutral.
  
• Infineon Technologies (NYSE: IFX) was upgraded to Outperform from Neutral at Credit Suisse.