It’s an example of the “herd on the street” instinct. For the past couple of months, one brokerage firm after another, reacting to the declining price of oil, has downgraded its ratings on a variety of energy stocks, in turn sending them sliding between 10% and 20%.

Now, with the price of oil rebounding to the high $50s a barrel from around $50, some Wall Street analysts are reversing course, and stepping up their recommendations on a host of individual energy shares.

Analysts say global demand, diminishing supply, and an ongoing premium related to threats of terrorism and supply disruptions suggest a higher year-end price in a range between $65 add $80 a barrel.

At the same time, a fair amount of my e-mails from readers continue to center on individual energy investments. One of the latest is from Maggie Ellenberg, who writes: “My broker has been pitching me on energy stocks for two years. I foolishly said no, and it cost me a lot of money. I’m now ready to say yes. My broker’s latest pitch is ENSCO International. Is it a good choice?”

Veteran investment adviser Richard Moroney seems to think so. Editor of one of the country’s prominent investment newsletters, Dow Theory Forecasts, Mr. Moroney, rates ENSCO, which closed Friday at $50.26, as a strong buy. What’s more, he sees a gain in the next year of about 20% to around $60.

Why so gung ho? For starters, he’s impressed with the company’s sparkling bottom line. ENSCO, a leading offshore drilling contractor, has either met or exceeded Wall Street’s consensus earnings estimates for 28 consecutive quarters. Further, consensus estimates project per-share earnings growth of 43% this year to $7.03 a share, followed by gains of more than 30% annually in the next five years.

The company’s latest reported figures are even more imposing, with per-share earnings from continuing operations jumping 221% in the first nine months of 2006 on top of a sales gain of 85%.

ENSCO, which operates a fleet of 46 drilling rigs, contracting with oil and natural gas companies to drill offshore wells, posted sales last year of $1.04 billion. Another four rigs are under construction and three have already been contracted. The company has a presence in major energy-producing regions worldwide and plans to deploy 68% of its fleet this year in international waters, up from 37% in 2006.

ENSCO’s stock is down from a 52-week high of $58.75. Other drillers have been sold off recently because of fears of an oversupply of natural gas and falling prices. But the company’s profits, Mr. Moroney points out, are in large part determined by rig utilization and pricing, both of which remain high. Further, rig supplies are tight and demand for services is strong.

Noting that solid industry fundamentals and company initiatives are keys to his buy recommendation, Mr. Moroney points to the following:

• Positive drilling outlook: Oil producers are under pressure to increase reserves and grow production. Likewise, global energy demand continues to increase despite high oil prices, fueled by emerging economies like China and India.

• Improving Gulf of Mexico day rates: While rig demand in the Gulf moderated last year because of deferred drilling activity in the hurricane season and lower natural gas prices, tighter rig supplies should boost rates this year.

• Robust international markets: Average day rates for ENSCO’s fleet rose 53% in the September quarter from results a year earlier. Forward day rates for most rigs have reached record levels, and contractors are increasingly willing to lock in long-term rig contracts at the current high rates.

In addition, ENSCO’s current contract backlog stands at $3.2 billion, nearly two times revenue in the 12-month period that ended in September. Further enhancing revenue growth, the company expects half of its international rigs to reprice at higher rates in the next six months. The company also trades at a discount of at least 20% to its peer group average based on price-to-book value, and price-to-cash flow ratios.

Mr. Moroney also favors such energy stocks as Chevron, ConocoPhillips, Oceaneering International, and Valero Energy.

dandordan@aol.com