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
|
1-Year Return
|
Current CAPS Rating
|
|
Talbots (NYSE: TLB)
|
53.8%
|
(50.7%)
|
*
|
|
Pyramid Oil
|
43.6%
|
N/A
|
*
|
|
Advanced Battery Technologies (Nasdaq: ABAT)
|
36.4%
|
110.2%
|
**
|
|
Transmeridian Exploration (AMEX: TMY)
|
26%
|
(62.5%)
|
**
|
|
ITT Educational Services (NYSE: ESI)
|
18.5%
|
(28.9%)
|
**
|
|
Fronteer Development Group
|
11.2%
|
(54.9%)
|
**
|
|
Finish Line (Nasdaq: FINL)
|
10.5%
|
(2.9%)
|
*
|
Data from Motley Fool CAPS as of July 2.
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 98% of all other CAPS players. That said, CAPS players have proven overly negative on some high-performing stocks. Are any of the stocks in the table above the same sort of unloved winners?
Advanced Battery gets charged
As you might gather from its name, Advanced Battery is all about batteries. Specifically, it sells rechargeable batteries for applications like miner's lamps, electric cars, and cell phones. And of course ABT thinks its batteries are the Kobe Bryant of the battery world (minus the attitude).
Though ABT is small, it's been growing like crazy. The company managed to nearly double revenue in the first quarter, and it just about tripled its profits versus the prior year. So what's had it soaring lately? Well, it doesn’t take much to get a sub-$300-million Chinese company jumping, but we can probably attribute a lot of the recent pop to the fact that the stock was added to the Russell 2000 index.
Still, don't be surprised if you see Advanced Battery's stock continue to show strength. Investors on CAPS have recently gotten a lot more bullish on it, and many seem to agree with hansthered0's conclusion that this is a "strong company, [with] strong growth and profit growth."
Talbots gets dressed up
If you're a retailer right now, you’re likely in a world of pain. (Unless you're Wal-Mart (NYSE: WMT) and can afford to sell your essential wares at ungodly low prices.) From the mighty Gap (NYSE: GPS) down to the likes of Coldwater Creek and Talbots, consumers' reluctance to spend is hitting the bottom line.
But Talbots -- which has much more going wrong for it than the current economic downturn -- has seen its stock soar lately. The chief reason is that the company's majority shareholder announced that it will be extending a $50 million credit line so that Talbots can continue working on its turnaround effort. While this was certainly good news for Talbots, the stock's reaction had fellow Fool Alyce Lomax and CAPS All-Star TMFIphone scratching their heads. TMFIphone gave the stock a thumbs-down for its quick spike, saying:
Taking on more debt when they can't even cover current interest expenses with operating income. [The] clothing just doesn't appeal to target audience anymore -- I've talked to my mom and her friends and they refuse to pay full price for Talbots clothing while years ago, they would spend the extra money to get an outfit that caught their eye there. This is the turnaround that will never be and investors are just pushing the stock higher on no fundamental reasoning.
Make your call
So what's your take? Is there good reason to get more bullish on these stocks right now, or are their outperforming days numbered? Head over to CAPS and let the community of more than 110,000 Fools know what you think. While you're there, you can start your research on any of the other stocks listed above -- or any of the 5,500-plus stocks on CAPS.
More CAPS Foolishness:
Get the best of the Fool delivered to your inbox every Friday
Terms & Conditions
RSS Headlines
Fool UK