Top-Rated Stocks the Leaders Loathe

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's 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:

What might have turned some of CAPS' top players against these otherwise widely admired companies? After all, each has a high star rating and, on average, 97% of the CAPS investors who've given an opinion think these companies will outperform the market.

An attractive patina
Southern Copper seems to be one of those investments that continues to confound the experts. This isn't the first time the Peruvian copper miner has appeared on the list, first rearing its head in November of last year, then again at the start of the new year. While the share price did sag at the end of January, it has now risen more than 57% since its nadir.

The copper mine strikes in Mexico undoubtedly weighed on the shares because output was slashed. That caused a material drop in sales and profits in the fourth quarter. The shares' weakness, however, gave management the confidence to institute a $300 million share buyback, and the company was further bolstered by analyst expectations of tight copper supplies. In fact, not only has Southern Copper benefited from the improved outlook, but others like Freeport-McMoRan (NYSE: FCX) and BHP Billiton (NYSE: BHP) have also seen their prospects rise.

Certainly that's what was behind the decision of top-rated CAPS All-Star jerry1027 to give Southern Copper an outperform rating. "[E]veryone needs copper especially places like China and India which are huge infrastructure plays. As with all commodities plays, it will be volatile, but i think it will trend upward for the [foreseeable] future."

Yet some CAPS investors feel that the demand coming out of emerging markets like India and China will cool off, leading to falling copper prices. CAPS All-Star ResearchLover, with a 97.98 player rating, thinks that Southern Copper will be subject to more volatility as various commodities spike and decline rather than reach a sustained plateau of higher prices.

Thumbs down based solely on downward momentum in this stock price over the last 6 months and copper price run up vs. growth in demand. What fraction of their profits come from silver would be relevant to know before making a RL short ... I think there is downward volatility/spikes likely for commodities tied to upward spikes in the dollar. Spikes, not new stable levels, though until monetary policy changes, and we all know that's not happening before the summer.

Make lemonade from lemons
We've seen the direction that 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. We're eagerly waiting for you to join the community!