Wall Street's Best Hidden Stocks

When asked for the secret of his success, baseball player Wee Willie Keeler replied, "Hit 'em where they ain't." What worked for Willie at the plate applies equally well in investing. 

Seeking stocks that others ignore, shun, or simply forget gives individual investors like you an edge over the professionals. When Wall Street turns a blind eye, you have a chance to get in before these stocks get discovered -- or rediscovered -- and start taking off. 

Below, we'll check out companies with only a handful of analyst coverage, then pair our list with the opinions of the Motley Fool CAPS community. A stock that garners CAPS' top ratings, but hasn't yet caught analysts' attention, could be your next home run investment. 

Stock

CAPS Rating (out of 5)

Wall Street Picks

5-Year EPS Growth

Rubicon Minerals (NYSE: RBY  )

****

1

NA

SIGA Technologies (Nasdaq: SIGA  )

*

2

1%

AVI BioPharma (Nasdaq: AVII  )

**

3

20%

Source: Yahoo! Finance; NA = not available.

Remember, without analyst support, you'll have to do your own scouting to see whether these stocks deserve a spot on your portfolio's roster. Don't just buy or sell them based solely on their appearance here. 

An insider selling his shares shouldn't be alarming, because as Peter Lynch has noted, they can sell them for any reason or none at all. It's when they buy that you should take note. However, Rubicon Minerals Rob McEwen just sold his entire stake in the junior gold miner and considering the symbiotic relationship that existed between Rubicon and Goldcorp (NYSE: GG  ) (McEwen's other gold investment vehicle) that has investors concerned.

But the Midas touch McEwen has wielded shouldn't necessarily cause investors to run for the exits. McEwen has said he wants to focus his time and investments on companies he actually manages -- Goldcorp and Minera Andes -- and Rubicon had assumed too large a position in his portfolio. He extolled current management and the prospects for the miner's future.

And why not? Its Phoenix Gold Project in the prolific Red Lake, Ontario, district is a potential gold bonanza. As gold soars to new record highs -- global quantitative easing and Japan's suggestion it will even by stock futures -- is pushing precious metals to new highs.

Insiders might not hold the same large stake that first attracted investors like CAPS member rupertmundy, but there appears to be plenty of catalysts to still make it a worthy bet. Let us know on the Rubicon Minerals CAPS page whether McEwen's sale tarnishes this otherwise bright prospect.

All charged up
Investors in antiviral maker SIGA Technologies have been waiting for the contract from Health & Human Services to come that will allow their company to reap the rewards of its R&D program. SIGA still appears to have the inside track on gaining the Biomedical Advanced Research and Development Authority (BARDA) contract and HHS recently released a preparedness and response report saying it's still on track to award new contracts for antiviral smallpox drugs this year. Well, with the year drawing to a close, we should be seeing something very soon.

Highly rated CAPS All-Star member zzlangerhans remains skeptical, though, and thinks the run up in Siga's price has been premature.

The latest upward surge on rumors has popped the price 20% in three days. There's not much else to support the share price here and dilutive financing is rapidly becoming a threat once again.

But biological weapons could be one of the biggest threats facing our country. While anthrax gets a lot of media attention and has big biotechs like Human Genome Sciences (Nasdaq: HGSI  ) deeply involved, a smallpox antiviral such as SIGA is developing could prove to be just as valuable.

A utility player
You could include the work AVI BioPharma is performing on treatment or the H1N1 virus in there, too. It's been working under a Defense Department contract to determine the efficacy of its influenza candidate, but investors have seen AVI along with other smallcap biotechs like BioCryst Pharmaceuticals (Nasdaq: BCRX  ) and Sinovac Biopharmaceutical (NYSE: SVA  ) surge on flu news before.

Yet AVI BioPharma recently reported encouraging results from two studies and that has CAPS members like zientsa believing it's only a matter of time before larger contracts are signed.

Anti-sense holds potential to provide potent anti-viral agents. Data on clinical impact of morpholinos on DMD due before the end of the year. Large government contracts anticipated in the near future. Early studies show their flu drugs more potent then Tamiflu.

You can head over to the AVI BioPharma CAPS page and let us know whether there is any sense to be made out of antisense. You can also add biotech to your My Watchlist page to get all the Foolish news and analysis about this stock aggregated for you.

Swing for the fences
When seeking investments where no one else is looking, Motley Fool CAPS is the best place to start your own research. 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 stock opportunities will help us go one up on Wall Street.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.

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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