5 Stocks That Swayed the Skeptics

It pays to be skeptical when you invest. In addition to doubting what the analysts tell you, you often have to discount what the companies tell you, too.

On Wall Street, going against the grain can reap huge rewards. Like baseball's greatest place hitter, "Wee Willie" Keeler, great contrarian investors such as Benjamin Graham, Warren Buffett, and John Neff "hit 'em where they ain't."

Today’s generation of contrarian investors are found at Motley Fool CAPS. These savvy Fools are willing to see both the upside and downside of a stock. While their often negative opinions peg them as skeptics, their top CAPS ratings mean they're right far more often than not. And when they find a stock they believe will outperform, perhaps we should take notice.

Here are some recent picks from our list of Foolish CAPS skeptics:

Company

CAPS Rating
(5 max)

Skeptic

Player
Rating

Pfizer (NYSE: PFE  )

***

TDRH

100.00

Oilsands Quest (AMEX: BQI  )

*****

StatsGeek

99.99

Transocean (NYSE: RIG  )

*****

chk999

99.99

CF Industries (NYSE: CF  )

****

TheGreatSatan

100.00

ReneSola (NYSE: SOL  )

****

nicvo

99.99

Just as their worst stocks would not be stocks to short, these skeptics' favorites are not automatic buys. But they do offer an excellent starting place for your own research.

Skeptically skeptical
Considering its recent IPO flop, ReneSola is getting a lot of positive investor attention. A series of manufacturing agreements, long-term supply agreements, and guidance that calls for an increase in production to 310-320 megawatts from 300 megawatts, is making this low-cost wafer manufacturer a possible future hot topic.

Its stock was punished again after a secondary offering, but that has investors like CAPS All-Star rabidtigerfan seeing beyond short-term issues:

Sol is an impressive company on many differnt levels. The company has impressive domestic sales as well as an expanding international market share. If oil continues to push upwards, this company will continue to thrive. The economic conditions in China will continue to fuel this [company's] growth. This company already does well with artficial price controls on oil.

A sticky wicket
Tar sands are not the most efficient spots to search for oil. Extracting oil from bituminous sand is an expensive process, but now that oil is well over $130 a barrel, it is suddenly looking more cost-effective. That's good for Oilsands Quest, which owns properties in Canada where the world's largest deposits of oil sands are.

CAPS investor strider888 sees Oilsands as perfectly positioned to take advantage of the next stage of oil's exploitation:

Great industry and space to take advantage of skyrocketing fuel prices. Oil sands are finally an affordable method of getting at oil and this company is perfectly poised to take advantage. Great long-term play, could double in less than 12 months from here.

Gaming the system
Another oil industry native benefiting from the high price of oil is Transocean, which drills in deep ocean waters. A deal with Petroleo Brasileiro (NYSE: PBR  ) to buy another deepwater drillship is expected to generate revenues of $1.7 billion over the first 10 years of the lease, with an option to extend it for another 10 years.

CAPS investor tthwebster thinks there will be a gusher of profits if previously closed drilling regions are opened as a means of mitigating higher oil prices:

Deep water drilling company is capable of drilling deeper than ever before. Opening up new areas as a result of recent mechanical/engineering developments. As one of the [world's] largest offshore drilling companies, stock will surge if previously restricted areas are opened up as current political dialogue suggest.

Seeing past the obvious
Skeptics know that just beyond the storm clouds lies shimmering clarity. Conversely, the sun can't shine forever, whatever the crowds may think. What's your forecast? Drop by CAPS and tell us which stocks are your favorite contrarian picks. 

Pfizer is a Motley Fool Income Investor pick as well as an Inside Value recommendation. Petrobras is also an Income Investor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.


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