Momentum investors love to back companies with 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?
Over on Motley Fool CAPS, we sometimes call them the savviest investors around. When one of our All-Star players -- those whose stock-picking prowess places them in at least the 80th percentile of our community -- sours on a top-rated stock, perhaps we should take notice. Perhaps the player has found a chink in that highflier's armor, or a question mark in its financial footnotes. Or 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 recently spurned:
|
Company |
1-Year Return |
CAPS All-Star |
Player Rating |
|---|---|---|---|
|
Silver Standard Resources |
25.9% |
GeneralGSkoal |
89.56 |
|
Northern Dynasty Minerals |
24.2% |
snookfisher |
91.70 |
|
National Bank of Greece |
11.1% |
martynanasi |
99.59 |
|
Nvidia |
6.5% |
oysternelson |
99.75 |
|
Valero |
2.3% |
mikotian |
98.54 |
Considering that on average, 97% of all the players rating these companies think they will outperform the market, what might have turned some of CAPS' top players against these otherwise widely admired companies?
Pebbles on the shore
The Pebble Project in southwestern Alaska has been hailed as perhaps one of the most important mine discoveries in recent memory, with rich deposits of gold, copper, and molybdenum. Northern Dynasty owns the rights to Pebble and has partnered with another mining name, Anglo American
With such partners lining up at the door, several potential large deposits of valuable ore, and the possibility of a merger always in play, it's not too surprising that only a baker's dozen out of more than 300 CAPS players has marked this miner as a stock to underperform the market. The debate between the bulls and the bears seems to center on whether promise can turn into gold.
Almost a year ago, CAPS player coldwaterak found that with local opposition to the mine strong, the Pebble Project is far less of a sure thing.
Personally from southcentral Alaska, the Pebble Creek Mine is a far shot from reality and up against a wall of [opposition] from the locals in Alaska. [Considering] that this is one of the biggest irons in the fire for N-Dynasty, I personally think it will be a long time before we see large gains if any from this company. ... While this looks like a great company with potential, the underlying facts erode its possibilities.
These were some of the same thoughts itemized by CAPS All-Star RayInTheVillages a couple of weeks later.
Yet while the opposition is there, CAPS investors like Razzamattaz see the willingness of companies like Rio Tinto to partner with it makes the potential much closer to reality.
Has arguably greatest known undeveloped copper resource and [molybdenum] resource in the world today, with some Gold ... thrown in. However need to get past those nearby salmon [fishermen] and lodge owners [whom] are fighting to [prevent] its development. Just a note, RIO Tinto the worlds 3rd largest miner owns [a large stake] of Northern Dynasty, I do not think that they would ... if there was not a chance ... of mining the resources and getting the go ahead.
Make lemonade from lemons
We've seen the direction some investors have indicated they believe these companies are heading, but Motley Fool CAPS is more than what the pros think, even if they're All-Stars. 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!
