Most stocks at some point become overpriced, often due to greed, exuberant market valuations, or a lot of hype. Rarely, though, does this overvaluation last.

I recently created a mini-storm of protest among some readers after I quoted an investor, Oregonian Mark Heller, who manages $3.5 million of his family’s assets, as saying he felt oil-producing giant Chevron had joined the overpriced category.

A definite risk-taker, Mr. Heller sent me an e-mail message a few weeks ago in which he mentioned he had sold short a handful of high-flying energy stocks, including Chevron, because “their big gains remind me of the hula hoop craze and they’re vulnerable as hell.”

Mr. Heller is not alone in his dismal view of Chevron; there’s a hefty 30.8 million share interest shooting at the company. In a follow-up e-mail message the other day, Mr. Heller pointed to a subsequent decline in Chevron shares and in energy stocks in general. “The energy selloff is under way,” he wrote. “Call the medics because a lot more blood is going to be spilled in energy stocks.”

Maybe yes, but then again, maybe no. Given the recent drop in the price of oil to about $126 from its peak of more than $135 a couple of weeks ago, which sent energy stocks skidding, Mr. Heller is looking good on his bold bet. That includes Chevron’s shares, which have dropped to $99.15 from their recent all-time high of $104.63.

His strategy may be right, but some pros — citing shrinking global supplies and rising demand, notably from emerging nations — say he might be battling a resumption of rising oil prices once the present selling wave runs its course. Some energy trackers, among them Goldman Sachs and Boone Pickens, continue to see the price of oil headed to record territory before year-end, possibly to $150 to $200 a barrel.

An interested party is reader Doris Mack, who inherited 13,000 shares of Chevron from her late husband, Solomon. Via e-mail, she wrote: “I am sick over what Mr. Heller had to say. Is he right? Should I sell my Chevron stock? My broker says no. What do you say?”

I checked with three pros. Their view was unanimous and unequivocal: Hold on to the stock. One, in fact, thinks you could buy more.

Two bulls are Oppenheimer & Co.’s energy analyst, Fadel Gheit, and Dune Energy’s chairman, Alan Gaines. Both believe major names, such as Chevron and Exxon Mobil, given their positive overall fundamentals, earnings visibility, and some dividend yield, merit holding for the long term. “I would certainly stick with Chevron for long-term growth,” Mr. Gheit says.

An analyst at newsletter publisher Horizon Investment Services in Hammond, Ind., Chuck Carlson, takes it one step further. He would buy Chevron at current levels, even though it has rebounded sharply from its 52-week low of $76.40. “I wouldn’t be afraid to climb aboard now,” he says. Citing a good dividend (2.58%), solid cash flow, and understated earnings, he sees about a 15% rise in the stock during the next 12 months.

Assessing the outlook for the energy industry, a number of experts express concern about depleting oil reserves. In Chevron’s case, Mr. Carlson notes investors have anxiously awaited a breakout in its oil production, which he says he believes the company is set to deliver this year.

On the heels of just two production startups in 2007, Chevron plans eight this year. At peak production, Chevron’s share of these fields should produce a combined 323,000 barrels of oil equivalent a day. That represents a 12% increase from Chevron’s March quarter production rate of 2.6 million barrels a day. Chevron has said it expects to produce roughly 3 million barrels a day by 2010.

Between 2009 and the end of 2013, Chevron expects to start drilling at fields with a combined peak production of more than 550,000 barrels a day. This steady stream of new projects, Mr. Carlson says, should generate enough production growth to offset declines at the company’s mature fields.

Mr. Carlson also argues that the current and probable price of oil should support Chevron’s stock price. He notes that consensus estimates project a gradual decline in per-barrel oil prices during the next few years to about $81 in 2010, and that no analyst expects the price to fall below $55 a barrel. The futures market is more optimistic; it expects spot prices to remain above $115 a barrel through 2010.

Against a backdrop of record high oil prices and expectations they will remain far above historical norms, “Chevron looks cheap,” Mr. Carlson says. His earnings estimates call for $11 a share this year and between $11.50 and $11.75 in 2009, “but I’m probably conservative,” he says. Chevron’s 2007 net ran $8.77 a share.

dandordan@aol.com