"Peabody Energy (BTU) remains a buy in our 'gushers portfolio'." says energy sector expert Elliott Gue.

In his The Energy Strategist, he explains, "Strong demand for coal from India and China is a growth story that will play out in 2010."

Gue explains, "Peabody reported its third quarter results and share prices have reacted positively. The weakness in US coal markets remains a challenge, but Peabody has taken steps to shore up profitability in the US, cutting back planned production and locking in contracts for 2010 at fixed prices.

"I'm adding Bucyrus International (NSDQ: BUCY) -- a maker of mining equipment -- to our 'Wildcatters Portfolio' as a play on coal," says Elliott Gue.

In his The Energy Strategist, the advisor explains, "With commodity prices recovering and Chinese demand for coal picking up once again, Bucyrus has likely seen the trough in its new equipment business."

"Bucyrus' top end-market is coal, which accounts for more than three-quarters of the firm's business. Coal mining equipment includes draglines, a sort of giant scoop used to scrape away the overburden (rocks and dirt) that covers coal.

"The oil-services sector remains my favorite long-term play in the energy industry," says sector specialist Elliott Gue. In The Energy Strategist, the advisor looks to industry-leader Schlumberger (NYSE: SLB).

Gue explains, "Oil services firms will benefit directly from the increasing technical complexity of oilfield development. International business is the primary driver for Schlumberger, which generated only 22% of its revenues from North America in 2008.

"The important question is, where do we sit in the cycle for international operations? In my view, the second half of 2010 will mark the beginning of a new uptrend.

"The US natural gas storage cycle is fairly straightforward: More gas is consumed in winter than in summer because natural gas is a key source of heat," explains Elliott Gue.

In his industry-leading The Energy Strategist, the energy sector specialist makes a bullish case for natural gas as well as contract driller Nabor's Industries (NYSE: NBR).

"The year started off with gas storage levels falling in line with the average. In late February or early March that all changed: Storage levels jumped and eventually broke to a new five-year high.

"I'm adding Itron (NSDQ: ITRI) to my diversified portfolio of stocks in the alternative energy space," says Elliott Gue.

In The Energy Strategist he explains, "The firm will benefit from both the HR 2454 bill (a cap-and-trade system designed to reduce U.S. greenhouse gas emissions) and the stimulus bill which included direct subsidies aimed at promoting efficiency and building a more intelligent electric grid.

"Itron is a leading play on energy efficiency and smart grid technologies, a key, near-term component of cutting carbon emissions.

"National Oilwell Varco (NYSE: NOV), a buy in our 'Wildcatters portfolio,' will see an outsized benefit from improving conditions in the global oil market," says Elliott Gue in The Energy Strategist.

"Rig technology is the crown jewel of National Oilwell's business; the unit builds key equipment used on land and offshore drilling rigs.

"The unit is currently benefiting from the boom in deepwater drilling activity -- one of the only drilling markets that continue to see growth.

"Equipment used on deepwater drilling rigs is far more complex and expensive than that used on land or shallow-water rigs. As a result, selling equipment into the deepwater market carries far higher profit margins for National.

"Canadian energy giants Suncor Energy (NYSE: SU) and PetroCanada (NYSE: PCZ) announced their intention to merge; Suncor, a holding in our 'Wildcatters Portfolio' will be the surviving entity," says Elliott Gue.

In his The Energy Strategist, he explains, "The combined firm will be the fifth-largest energy company in North America and the largest in Canada." Here, he explains why the new stock remains a buy.

"The combined firm will have more financial flexibility than Suncor did on its own. Debt ratios will be healthier, and the combined firm will also be able to redirect certain planned capital expenditures to higher return potential projects.

Energy sector specialist Elliott Gue sees opportunity in Transocean (NYSE: RIG), a leadin player in the deepwater drilling area. Here's the latest advice from The Energy Strategist.

"The market for deepwater rigs, however, has remained resilient and one drilling with direct leverage to deepwater rigs is US giant, Transocean, the world's largest offshore drilling company, with 136 rigs as well as ten under construction.

"Roughly 68 of those rigs are 'semisubmersibles,' and 39 are ultra-deepwater or deepwater rigs capable of drilling many of the complex plays being targeted around the world today.

This post is part of a 12-article feature that can be read here: Today's best income ideas.

"Master limited partnerships have been among the market's most stable and reliable groups; but 2008 was a painful exception, with the benchmark index down nearly 37%, the worst performance in its 13-year history," says Elliott Gue.

In Personal Finance he now sees a "great opportunity" for investors to takes positions in this high-yielding sector. Here's a trio of favorite investment plays in the MLP arena.

"Long term, supply remains the key issue to watch in the crude oil market; depressed prices continue to force producers to scale back on exploration and development spending," says energy expert Elliott Gue.

In The Energy Strategist, he says, "I watch oil service giant Schlumberger (NYSE: SLB) as a gauge of overall health in energy markets; it has its hands in just about every imaginable oil- or gas-producing market on the planet."

"Schlumberger's fourth quarter earnings release and conference call were far and away the most bearish from the company in at least five years.

"CEO Andrew Gould was notably downbeat, particularly during the analysts' question and answer (Q&A) session. Predictably, earnings estimates have plummeted since that call.

This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.

Italy's Eni SPA ADR (NYSE: E) has one of the most successful and fastest-growing E&P operations of any major integrated energy firm," says energy expert Elliott Gue.

In his The Energy Strategist, he notes, "And despite its defensive characteristics, Eni offers an impressive 8.5%, the highest of the large integrated oils."

"ENI derives close to three-quarters of its operating income from exploration and production (E&P) and just 3.8% from refining and marketing.

"Thus, Eni has more leverage to E&P than most large integrated energy firms and less exposure to refining margins. The company's other main business is gas and power, accounting for close to 22% of operating income.

"Eni has one of the most successful and fastest-growing E&P operations of any major integrated energy firm. In the third quarter, Eni's production grew to 1.764 million barrels of oil equivalent per day (boe/d), up 6.3% over the same quarter a year ago, the fastest growth of any integrated firm in my coverage universe.

"And Eni has a large number of new projects scheduled to come onstream over the next three years that are poised to power further production growth.

"Valuations for even the best-placed, most well-established companies in the energy space are sitting at levels unseen since the late 1990s when oil prices collapsed to around $10 per barrel," says energy sector specialist Elliott Gue.

Here, the editor of The Energy Strategist looks at Schlumberger (NYSE: SLB), noting, "The firm active in just about every imaginable market and I regard the company as a top-notch indicator of ongoing trends in the oil services business."

"It's clear that there's been some slowing in demand, and the credit crunch has had an impact on the fundamental business. But the reaction in the stock market over the past three months goes well beyond even a worst-case scenario.

"Bottom line: Many energy-related stocks are pricing in a severe recession and recent action in the broader markets is reminiscent of sentiment characteristically seen near market lows. The short-term outlook for the energy patch is much better now than it was during the bear market in 1998 and 2002.

"I regard Schlumberger as a top-notch indicator of ongoing trends in the oil services business and, more broadly, international oil and gas drilling activity. I always pay close attention to what Schlumberger has to say in its conference calls and, as usual, this quarter's call was instructive.

"If there's one sector that stands to benefit handsomely from a further slide in oil or, at least, a moderation in crude's rally: the airlines," explains energy sector expert Elliott Gue.

In The Energy Strategist, he says, "Airlines may make a terrible long-term investment but can be an outstanding short-term trade." Here he looks at Delta Air Lines (NYSE: DAL) and, for the even more speculatively-inclined, US Airways (NYSE: LCC).

"Some investors will rightfully cringe from any mention of this sector; after all, the airlines have consistently lost money throughout their post-deregulation history.

"Most of the majors have declared bankruptcy on multiple occasions since that time. However, we've traded the airlines on a few occasions; we took some triple-digit percentage gains in the airlines back in 2005.

"The airlines' leverage to oil prices is well known. Expectations are so low, in fact, that several major air carriers actually managed to beat consensus expectations in the second quarter.

"And although sentiment is already at rock-bottom, there's a real basis for cautious optimism. First, if I'm right about oil, fuel costs won't rise appreciably in the third quarter. This huge headwind is dissipating.

Although he has been maintaining a cautious stance on the refining group, energy sector expert Elliott Gue is now boosting the rating on Valero Energy (NYSE: VLO).

In his The Energy Strategist, the advisor explains, "Valero is now attractive for three reasons: superior geographic exposure, refinery complexity and a new focus on profitability."

"Our caution on the refining group was due to expectations that crack spreads would be weak through the spring, a period during which spreads tend to widen. Overall, this call was correct: Refiners have underperformed the energy patch since mid-March.

"And longer term, I have some concerns about new refining capacity expansions due to come online over the next few years. As this supply comes online, it could put downside pressure on margins.

"But over the next six to nine months, the refiners look like a compelling play. Gasoline inventories are now back in line with seasonal norms; it's likely gasoline prices will now rally further relative to crude oil. In fact, we're already seeing an obvious spike in crack spreads.

"One of my favorite indicators for the energy markets is the quarterly conference calls and earnings releases from Schlumberger (NYSE: SLB)," says energy sector expert Elliott Gue.

In his The Energy Strategist, he explains, "In this quarter's call, Schlumberger's management team was notably upbeat, the most positive on industry growth expectations in more than a year. This is a key shift in sentiment that has broader implications for the energy patch at large."

"Schlumberger's reports and conference calls have proved extraordinarily useful in the past for determining the most profitable trends and investment themes. The reason for that is simple: Schlumberger is the largest oilfield services company and has its hand in just about every imaginable market all over the world.

"In addition, the company has traditionally offered long, detailed conference calls; CEO Andrew Gould often relates far more than the outlook for Schlumberger and offers considerable color and detail concerning trends for the industry in general.

"This quarter's conference call was no exception. Schlumberger's outlook this quarter was far more upbeat than in its third and fourth quarter 2007 earnings calls.