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Top-Rated Stocks the Leaders Loathe

Momentum investors love backing companies that have the wind in their sails. Contrarian investors typically pick up the cigar butts the market has tossed aside. So what do you call investors who turn against winners? Sourpusses? Shorts?

On Motley Fool CAPS, we sometimes call them the savviest investors around. When one of our All-Star players -- those whose stock-picking prowess puts them in the 80th percentile of our community -- sours on a top-rated stock, perhaps we should take notice. Did the player find a chink in that highflier's armor, or a question mark in its financial footnotes? Maybe it's just a hunch. That's why these tables aren't lists of stocks to buy or sell -- just starting points for further research.

Here's a list of stocks that some All-Stars have spurned recently:


CAPS Rating
(5 max)

1-Yr Return


Player Rating

ShengdaTech (Nasdaq: SDTH  )





Wonder Auto Technology (Nasdaq: WATG  )





Chesapeake Energy (NYSE: CHK  )





Coeur d'Alene Mines (NYSE: CDE  )





Lundin Mining (NYSE: LMC  )





Considering that, on average, 98% of the investors think these companies will outperform the market, what might have turned some of CAPS top players against these otherwise widely admired companies?

Sliver of silver
Despite the hoopla around gold's record prices, real interest has been growing in the silver mines. The ugly, red-headed stepchild of precious metals, silver might make a better investment than its yellow cousin, and Coeur d'Alene Mines could be a prime player to achieve that.

According to The Silver Institute, total industrial demand exceeded 50% of total global fabrication demand for the first time in 2006. Supply from the top silver mining countries like Peru, Mexico, China, Australia, and Chile dropped 10% at primary mines. Silver prices have risen almost 70% over the past two years and could rise even higher.

Coeur d'Alene Mines is set to become one of the world's top silver producers with its recent purchase of Palmarejo and Bolnisi, putting it on par with Silver Wheaton (NYSE: SLW  ) and Pan American Silver (Nasdaq: PAAS  ) . Coeur d'Alene is expected to increase silver production to nearly 30 million ounces by 2009, making it the largest silver company of the three, but also the one with the lowest cost per ounce.

Top-rated CAPS All-Star Sinchiruna, with a 99.75 player rating, noted a year ago that Coeur d'Alene remains a "dirt cheap" stock, considering its market cap compared to its reserves.

Though priced like a junior miner, CDE has been around since 1928 and has interests in properties on 4 continents. ... [T]he company is poised to enjoy excellent leverage to the rising prices of silver and gold. Current gold and silver reserves total over $5 Billion, while market cap lags at just $1.22 Billion. CDE remains dirt cheap.

CAPS player endoftherainbow agreed earlier this month that Coeur d'Alene should outperform the market but offers a note of caution.

CDE has large, productive silver reserves. The price of silver is going up and the price of S&P 500 is going down to U.S. recession and other global factors resulting in "flight to safety." The only fly in the ointment is management's tendency to dilute shares.

Perhaps that's the reason we've seen All-Star johntartar mark down the prospects of this silver miner, or maybe it's because we've heard about silver reaching $50 an ounce again, that there might be more hype than hope in the promise.

Make lemonade from lemons
We've seen the direction some All-Stars have indicated they think these companies are heading, but Motley Fool CAPS is more than what one player thinks, even an All-Star. It's where we invite you to share your thoughts and insights and add your voice to the debate. Go ahead, have your say. We're eagerly waiting!

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Related Tickers

10/26/2016 4:00 PM
CDE $10.99 Down -0.35 -3.09%
Coeur Mining CAPS Rating: **
CHK $6.00 Down -0.11 -1.80%
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PAAS $15.92 Down -0.74 -4.44%
Pan American Silve… CAPS Rating: **
SLW $23.95 Down -0.34 -1.40%
Silver Wheaton CAPS Rating: ****