Wall Street's Best Unknown Stocks

"Hit 'em where they ain't" was a famous baseball quote indicating how Wee Willie Keeler was able to be so successful. The same applies to investing.

Looking for stocks that others are ignoring, have forgotten about, or turned their backs on gives you, the individual investor an edge over the professionals. Because Wall Street ignores them, you have a chance to get in before they're discovered -- or rediscovered -- and the stock takes off.

Below, we'll check out companies with only a handful of analyst coverage and pair that up with the opinions of the Motley Fool CAPS community. A combination of flying under Wall Street's radar with top ratings from the investor intelligence database could be a combination that lets you hit it out of the park.

Stock

CAPS Rating
(out of 5)

Wall Street
Picks

5-Year EPS
Growth

InterOil (NYSE: IOC  )

*

3

25%

Rambus (Nasdaq: RMBS  )

**

1

10%

Stillwater Mining (NYSE: SWC  )

****

1

N/A

Source: Yahoo! Finance, Motley Fool CAPS.

Of course, without analyst support, that means you're going to have to do your own scouting to see if these stocks are worth putting on your portfolio's roster. Don't just buy or sell them based on their appearance here.

A utility player
Hmph! Maybe they were wrong all along. Independent oil and gas exploration shop InterOil has borne for quite awhile the disdain of analysts who've doubted its ability to ignite a fire of interest in its Papua New Guinea projects. Indeed, the Fraud Discovery Institute has led a charge against the company suggesting InterOil was engaged in a quest to hype its stock merely to boost the price.

InterOil looks like it may have the last laugh though, as it announced it entered into agreements with the huge Japanese conglomerate Mitsui to fund and operate the Elk and Antelope fields in PNG. At least one analyst has written a mea culpa of sorts, saying the announcement "certainly confirms the viability of the condensate project." With PNG possibly becoming a major natural gas exporter in the years ahead, ExxonMobil (NYSE: XOM  ) is moving forward with plans for a huge LNG plant there and it underscores the interests InterOil has in the country.

That's gotta be sweet vindication for investors who've backed InterOil efforts in the face of scorn, like CAPS member maestro43 who dismisses the naysayers and focuses instead on what the company is doing.

Regardless of what the detractors and shortsellers say, [InterOil] has tremendous assets and strategic positioning to market them. Within 4 years market cap should be in the neighborhood of 25 Billion.

Remember this
I'll admit to being surprised memory chipmaker Rambus was as underfollowed as it is. With the ubiquity of its chips reaching into virtually all aspects of consumer electronics, it's odd more analysts aren't offering up an opinion on its future prospects.

The far-reaching effects of the patents it holds can be seen in the long-running dispute it's had with NVIDIA (Nasdaq: NVDA  ) . It received a mixed bag with the U.S. Patent Office last month -- which upheld one patent, dismissed another, and played Solomon with a third. If the decision is held up, it would be a major victory for the company. The International Trade Commission is also reviewing Rambus's patents with NVIDIA, and a ruling there will impact Hewlett-Packard (NYSE: HPQ  ) one way or the other as it was named in the lawsuit as well.

Following a decision by Samsung to settle with Rambus earlier this year, CAPS All-Star member einsteinpfleet says NVIDIA will feel the pressure to do likewise: "Ruling with Samsung sets up future rulings. Nvidia will have pressure from customers to settle. Stock price should move higher over next few months."

It's palladium, my precious
It's coming down to simple supply and demand issues that will push the price of palladium and other precious metal group metals higher, says Stillwater Mining, the only U.S. producer of palladium and the largest producer of platinum metals outside of South Africa and Russia.

Inventories are exceptionally low while demand for the metal continues to run hot. Rebounding auto sales has Stillwater convinced it will push forward both palladium and platinum, but a tightening supply market will lead to a "fundamental palladium market deficit," according to its CEO. No doubt investors in Canadian palladium producer North American Palladium (NYSE: PAL  ) will be heartened by the forecast.

CAPS member Ruleoflaw admits that if he were forced to choose one investment Stillwater would be it, but he does allow he likes NAP as well.

[Stillwater Mining] and [North American Palladium] have the only major mines of platinum, palladium, and associated metals located in stable countries. [Stillwater] seems the better curently.

I've already picked both companies to outperform the market, but you can add your choice at the Stillwater Mining CAPS page.

Who dat?
It pays to seek out investments where no one else is looking, and the best place to start your own research on these stocks is 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.

Sign up today for the completely free service, and tell us whether these hidden opportunity stocks will help us go one up on Wall Street.

NVIDIA is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletter services 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.


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