These 5 Underdogs Are No Dogs

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Short-sellers and hedge funds, though sometimes shadowy, are often seen as the smartest guys in the room. They did their homework and will bet their capital against the crowd. It's not the most popular way to go, but the rewards can be quite lucrative.

On Motley Fool CAPS, we've got our own brand of leading analysts who found the chinks in a company's armor and correctly called its fall. "Underdogs" are investors who earned 100 or more CAPS points correctly predicting one or more stocks would underperform the market.

Let's look at some of the recent calls these All-Star investors have made, no matter which way they've called them.


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Ford (NYSE: F  )





Sulphco (NYSE: SUF  )





Apple (Nasdaq: AAPL  )





Vale (NYSE: RIO  )





First Solar (Nasdaq: FSLR  )



Not every short sale goes as planned, so it's a risky position to hold. Stock prices can be irrational for longer than you have money to stay in the game. So don't use this as a list of stocks to sell or buy, but rather as the launching pad for further research.

Underdogs still wag their tails
It's hard to imagine that a company that has lost more than $11.8 billion over the past year -- an amount almost equal to the GDP of Iceland -- is actually considered the healthiest competitor around. But that's just where Ford finds itself these days. With the government rushing to release the loans it approved to General Motors (NYSE: GM  ) to keep it afloat, CAPS member vitrvuianman believes it's ludicrous to believe that any of the U.S. carmakers will go under:

I think its ridiculous how some of you think that Ford and [General Motors] are going to completely sink. This stock hasn't hit rock bottom but you're clueless if you think they are going to go under. If any of these U.S. automotive staples starts to look like they're anywhere near capsizing then guess what? The U.S. government is going to save them, plain and simple.

It may also be that help from the government -- a dual-edged sword if ever there were one -- may be what helps keep solar energy shining. CAPS members like SuitedAces think the expanded opportunities offered by the investment tax credits passed by Congress will help First Solar, Suntech Power (NYSE: STP  ) , and others in the long run:

The tax credits for solar initiatives run for 8 years, which is particularly important for big projects that need to arrange financing in the next year or so. In addition, the $2,000 tax credit limit for residential solar systems has been lifted, meaning that homeowners can get a 30% tax credit on the solar panels they install starting next year. And this time utilities can also take advantage of the tax-advantages.

There's no need to fear ...
Underdogs can be heroes, but it takes more than a few All-Star picks and a quick paragraph to make buy or sell decisions. So start your own research on these stocks on Motley Fool CAPS, where your opinion can save the day. While there, you can 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.

Suntech Power is a Motley Fool Rule Breakers newsletter recommendation. Apple is a Stock Advisor selection. Try any of our Foolish newsletters today, free for 30 days.

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

Read/Post Comments (4) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 28, 2008, at 4:15 PM, Brettze wrote:

    Remember , our govenrment will not bail out chicken or turkey investors running away from stocks at its historic lows... Those stocks will go up and the turkeys will get beheaded!

  • Report this Comment On October 28, 2008, at 4:16 PM, Brettze wrote:

    What is the difference between a chicken and a turkey investor? You can laugh at chickens but turkeys chase you!

  • Report this Comment On October 28, 2008, at 5:07 PM, javnnf wrote:

    And there are so many others (in a vast majority) whose star 4-star ratings is as bad as 1-star rating. And yet MF staffs keep quoting on the collective intelligence.

    CBI is just one such example.

    CBI has been recommended in at least 3 MF articles, and since July the sticks are down by 80%. MF staff has chosen to ignore my feedback and comment on their misleading recommendations.

    Read this alternative report on CBI:

    The collective intelligence of CAPS is totally bogus-- 4-star rating for this all madeup PE/growth company?

  • Report this Comment On October 30, 2008, at 1:41 AM, uclayoda87 wrote:

    It is uncertain if GM the company will go under, but GM the stock is unlikely to survive any government bailout. For an example, check the AIG stock.

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