Stocks That Swayed the Skeptics

It pays to be skeptical when you invest. In addition to doubting what the analysts tell you, you often have to discount what the companies tell you, too. On Wall Street, going against the grain can reap huge rewards. Investors such as Buffett, Graham, and Neff abhor the "wisdom of crowds."

Today's new breed of contrarian investor can be found at Motley Fool CAPS, where these savvy Fools are willing to see both the upside and downside of a stock. While their often negative opinions peg them as "skeptics," their top CAPS ratings mean they're right far more often than not. And when they find a stock they actually believe will outperform, perhaps we should take notice.

Here are some recent picks from our list of Foolish CAPS skeptics:

Just as a list of their worst stocks would not be a list of stocks to short, this list of the skeptics' favorites doesn't represent automatic buys. But these ideas do offer an excellent starting place for your own research into extreme buying opportunities.

Inquiring minds want to know
Monsanto knows a thing or two about weed control, having dominated the industry with its Roundup brand of herbicide. A recent article in the Wall Street Journal highlights how DuPont (NYSE: DD) lost about 90% of the business for its Classic weedkiller in the aftermath of Roundup's introduction.

But a decade of usage has led to what the Journal calls "superweeds," plants that have grown resistant to Roundup, which are spurring new developments in the industry. Syngenta goes so far as to say that the weedkiller business "is getting fun again."

Yet even as rival Dow Chemical (NYSE: DOW) pursues its own anti-weed solution, it's nonetheless licensed Monsanto's Roundup Ready 2 technology to create soybean seeds impervious to the herbicide.

Highly rated CAPS All-Star Griffin416 likes the seed maker at this discounted price:

This company does have problems, lawsuits, generic competition, it guided down significantly. But the stock has been punished so severly it seems at this point to be more than priced in. I have been watching/ waiting for some catalyst.

No sinking feeling
The deal that removes the San Dimas silver mine from Goldcorp's (NYSE: GG) hands, at what seems an incredibly bargain-basement price, could have tarnished Silver Wheaton as well. The latter company had rights to the silver from the mine. Yet the Fool's precious metals guru Christopher Baker thinks the arrangement is a winning hand for everyone.

Goldcorp gets a 30% stake in the new mining company, Primero Mining, along with some cash. Silver Wheaton gets a lifetime grant of the silver from the mine, instead of having those rights expirein 2029. Primero gets to be a low-cost producer whose initial guarantees of output to Silver Wheaton get reduced, in exchange for the lifetime guarantee.

As CAPS member uclayoda87 rightly notes, Silver Wheaton has an enviable track record of producing outsized results from others' efforts:

[Silver Wheaton] will achieve its potential by creating value from the byproduct of other miners. The only question is how big a profit will they make. Their estimates are based on a conservative price for silver, which is taken out of the Apple playbook for managing analyst expectations. But like Apple, when the silver price rises to more realistic levels, the earning report for [Silver Wheaton] will far exceed expectations.

The stock you love to hate
Having unleashed an ecological catalcysm in the Gulf, BP is currently one of the most vilified companies around -- just not as much as Goldman Sachs (NYSE: GS), which many undoubtedly feel has unleashed a financial cataclysm on the world. Although some correctly wonder whether the oil giant will be able to survive the financial hit the leak will wreak, the Fool's Matt Koppenheffer points to the company's $7 billion in cash, $20 billion in trailing profits, and $30 billion in operating cash flows. Matt suggests that the company won't just survive -- it's also a buy in his book.

CAPS member SheryarM also thinks there's a disconnect between BP's ability to pay, and the emotion clouding investors' judgment:

Typical emotional overreaction of the market, and hyped by the media. Opportunity at current shareprice. Disconnect emotional and ratio... I have an uncle who is unemployed due to this disaster. I share in blaming BP, BUT I am buying its shares, as I am looking to share in longer term profits.

I think the wound is a little too raw yet to decide whether BP is a good investment right now; politicians are only just beginning to ratchet up their rhetoric against the oil company. Why not head over to the BP CAPS page and give us your opinion on whether it can -- or should -- survive?

Seeing past the obvious
Skeptics know that just beyond the storm clouds lies a shimmering morning. Conversely, the sun can't shine forever, whatever the crowds may think. It pays to start your own research on these stocks on Motley Fool CAPS, so stop by and tell us which stocks are your own favorite contrarian picks.