8 Best Micro Cap Stocks to Buy According to Analysts

5. Ring Energy, Inc. (NYSE:REI)

Market Cap as Of October 29: $305.19 Million

Stock Upside Potential: 98.68%

Number of Hedge Fund Holders: 11

Ring Energy, Inc. (NYSE:REI) is one of the best micro-cap stocks to buy, according to analysts, to diversify an investment portfolio in the energy sector. Operating as an independent oil and natural gas company, it acquires, explores, and develops oil and natural gas properties. Amid the turmoil that has seen oil prices plunge from above $80 a barrel to lows of $68 a barrel, Ring Energy is still up by about 6% for the year.

Ring Energy, Inc. (NYSE:REI) controls 96,000 acres of land in the Permian Basin for oil and production. With about 129.8 million of oil reserves, it is one of the companies well positioned to profit as long as oil prices stabilize above the $50 a barrel level.

The company’s second-quarter results came in better than expected, with revenues surging to $99.14 million compared to $79.35 million a year ago. The increase was fuelled by a 2% increase in oil production, averaging 13,623 barrels per day, a 2% rise from Q1. The increase came despite oil prices averaging less than $80 a barrel. Likewise, its earnings per share totaled $0.12 a share, meeting consensus estimates.

Ring Energy, Inc. (NYSE:REI) generated an adjusted free cash flow of $21.4 million during the quarter that reached $37 million in the first half of the year, representing 60% year-over-year growth. Consequently, Ring Energy reduced its net debt by $15 million.