For the two latest buys in his Winning Stocks newsletter, editor Harry Domash looks towards oil. His first pick, deep sea drilling Transocean (NYSE: RIG) is chosen for growth, while his second play, crude tanker operator, Frontline (NYSE: FRO) is selected for income.

The advisor explains, ""In my view, Transocean dominates an industry sector that can only grow from here. The company is a global provider of deepwater oil and gas well drilling services. Its newest equipment is able to go 10,000 feet below the ocean surface to reach oil."

Already the biggest deepwater driller, he observes, Transocean has agreed to buy competitor GlobalSantaFe. The deal, he notes, is expected to close by the end of the year.

Meanwhile, since the consumption of crude oil is growing around 2% annually, and the easily accessible oil reserves are being depleted, the advisor concludes that demand for deepwater drilling services is growing rapidly.

Meanwhile, he adds, "Transocean reported June quarter earnings of $1.84 per share vs. year ago $0.42. Revenues rose 68% to $1.43 billion. Analysts expect Transocean's revenues to climb 50% this year to $5.9 billion. They forecast earnings for the year of $7.96 per share, up 166% over '06. He rates the stock a buy for those willing to hold the shares for 12 to 24 months.