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 members -- 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 member'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:
Sources: Yahoo! Finance; Motley Fool CAPS.
Considering that, on average, 96% of the members rating these companies think they will outperform the market, what might have turned some of CAPS' top players against them?
Fear and loathing
Even with oil prices having fallen quite a bit, demand for alternative energy sources has not. While there may be concern that low fuel costs will once again whet the American consumer's appetite for Hummers, SUVs, and pick-ups, at least to this Fool there seems to be a more lasting change of heart. Solar energy plays like ReneSola and Suntech Power (NYSE: STP ) still seem like viable entities, even if their shares have fallen.
Apparently in line with this sort of thinking, member clwilson728 sees ReneSola as offering an excellent return on investment. "As America looks for more ways to produce clean, efficient energy, this company could see a nice ROI."
Companies that came on the solar scene a decade ago were too early. Being in the right place at the right time is often just as critical as having the right product. That might explain the growing popularity of Toronto-Dominion Bank, which CAPS member SwordAgain felt last month was stepping into the breach created by the downturns in more well-known names like Wachovia (NYSE: WB ) and the now-failed Washington Mutual:
They are expanding their franchise into the U.S. This might actually be a good time to do that since their competitors in the U.S. are struggling. Sometimes you're just in the right place at the right time. Execution is everything but [they] are well managed.
As a bank with below-average subprime exposure, CAPS member ChrstphrRCA feels that Toronto-Dominion is now at a cheap price with a good dividend:
Canadian Bank with less of an exposure to the U.S. subprime morass. All CDN banks have been declining, wiping out several times the value of their writedowns of their subprime exposure.
Now we're left with a stock that pays out a decent dividend, and it's cheaper than it's been for years.
And I've been banking with them for over a decade. Can't stand the fees as a customer, but I appreciate them as a business.
Make lemonade from lemons
It pays to start your research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. 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. Let's hear what you have to say!
RSS Headlines
Fool UK