Successful investing requires you to think independently and stick to your convictions. That's hard enough with stocks that are generally popular -- after all, in the stock market, there's a seller for every buyer. But it gets even tougher with stocks that can't seem to find good press or bullish investors anywhere. Of course, defying popular opinion has led many contrarian investors to great returns.
In that spirit, I've headed to Motley Fool CAPS to dig up some unloved stocks that have delivered big gains to shareholders over the past month. Our community of investors has put each of these companies on the bottom two rungs of the CAPS rating scale:
|
Stock |
30-Day Return |
One-Year Return |
Current CAPS Rating (out of 5) |
|---|---|---|---|
|
Pharmasset |
142.1% |
N/A |
** |
|
Origin Agritech |
55.8% |
(10.9%) |
** |
|
Akeena Solar |
29.6% |
N/A |
** |
|
REX Stores |
18.7% |
10.3% |
* |
|
Neurocrine Biosciences |
13.2% |
(58.0%) |
** |
|
Delta Air Lines |
12.9% |
N/A |
* |
|
Heelys |
12.7% |
(80.9%) |
* |
Now, given CAPS' knack for accurately gauging winners and losers, I'm not recommending that you run out and buy these stocks! An index set up to short CAPS' least-liked stocks has outperformed more than 99% of all other CAPS players. That said, CAPS players have proved overly negative on high-performing stocks such as Crocs and DryShips. Are any of the stocks in our table the same sort of undercover rockets?
Do research? You're kidding!
That's right. The best way to figure out whether any of these stocks is worth considering for your portfolio (real or CAPS) is to roll up those sleeves and dig in a bit. What we're looking for here are stocks that have good fundamentals -- a profitable business, good management, and some decent growth prospects -- despite their lack of popularity.
Unfortunately, I find it hard to pick a real winner among this week's group. Pharmasset provided the most bang for its investors' bucks -- it doubled and then some on good news about its experimental hepatitis C drug. The trial was an early-stage one, though, and the company still faces significant hurdles before it can capitalize on the drug -- even if it is one of the more promising hepatitis C drugs being tested.
And though it appears to have that good ol' China momentum angle working for it, Origin Agritech doesn't do it for me, either. The stock has certainly been exciting, but that's about where it ends. The company carries a relatively hefty valuation for one that sells crop seeds, and in the last full period in which it reported, it had managed to burn through a significant amount of cash. Peter Lynch may have liked unexciting businesses, but only when they actually produce results.
As for Heelys, well, many may have cried "fad" too soon on Crocs, but it looks as though the wheeled shoe might fit in Heelys' case. Though the stock charged into the public markets with a lot of sound and fury, it doesn't appear to have the growth that will back up the bluster, unlike competitor Crocs. CAPS All-Star rosepicker tapped into the Heelys market to get the scoop and noted: "My son says that they are done. He's 10."
So what's your take on this group? Is there more value here than I've concluded? Head over to CAPS and let the community of more than 81,000 Fools know what you think. While you're there, you can start your research on any of the other stocks we've listed here or on any of the 5,000-plus stocks on CAPS.
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