One of the best ways to profit in the stock market is to look where others aren't. Wall Street's convenient inattention to a whole slew of promising companies is an opportunity to make big winners of small investors. For example, the market ignored Celgene
With this in mind, I used our new CAPS screening tool to discover promising companies Wall Street may be overlooking. Below are five companies with no more than five CAPS-rated analysts calling the stock.
They have:
- Market caps between $250 million and $2 billion.
- At least 300 total calls from our entire CAPS community.
- Four or five-star ratings, the highest possible, from our CAPS community.
Since we began tracking the collective intelligence of our CAPS investment community in November 2006, four-star companies outperformed the market on average by 7% annualized. Five-star stocks did even better.
|
Company |
Sector |
Market Cap (millions) |
No. of Wall Street Picks in CAPS |
|---|---|---|---|
|
Cal-Maine Foods |
Consumer Goods |
$708 |
4 |
|
Oilsands Quest |
Basic Materials |
$590 |
3 |
|
First Marblehead |
Financial |
$279 |
5 |
|
GeoEye |
Technology |
$417 |
5 |
|
GigaMedia |
Technology |
$395 |
5 |
Data from Motley Fool CAPS and Yahoo! Finance as of Sept. 29.
Of course, screens are only a first step in the stock selection process. True Fools use due diligence because they know that not every underfollowed company will necessarily become one of the market's 10 best stocks.
Come and join us on Motley Fool CAPS to let the collective wisdom of our 115,000-person-strong CAPS community help you make your investment decisions. Check it out-- it's free and fun to participate.
For more Foolery:
On Oct. 7, 2008, Fool co-founder David Gardner and his Motley Fool Pro team will invest $1 million in a portfolio designed to help you make money in any market. In the coming weeks, the team, relying heavily on proprietary CAPS "community intelligence" data, will establish long and short positions in a broad range of securities, including common stocks, publicly traded put and call options, and exchange-traded funds (ETFs). To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.
