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 St. Picks

Est. EPS Growth 
Next Year

Anika Therapeutics (Nasdaq: ANIK  )

*****

0

NA

Brigus Gold (NYSE: BRD  )

*****

0

NA

Duoyuan Global Water (NYSE: DGW  )

****

2

12%

Source: Yahoo! Finance; Motley Fool CAPS; NA = not available.

Remember, without much 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. 

Hiding in plain sight
What a difference a week makes. After apparently getting its signals crossed with the FDA over a final site inspection the agency was supposed to conduct, Anika Therapeutics surged as news of a new distribution agreement means that revenues it is going to lose as customer Bausch & Lomb transitions to a new, low-cost supplier might not be as bad as previously thought.

Anika was trying to move to a new manufacturing facility, but the FDA never showed up to inspect it as originally planner. That means the biotech is going to have to incur costs as it has to run two facilities until June, which wasn't a pleasant thought with the reduced revenues it was expecting to receive from B&L for its premium ophthalmic viscoelastics products. Anika sells such products to Buasch & Lomb, Staar Surgical (Nasdaq: STAA  ) , and others.

B&L agreed to extend its supply agreement with Anika at lower rates, and also gave the biotech the chance to sell to other companies as well to soften the blow of revenue loss. As a result, Anika signed up a new distribution partner to get new clients on board and its stock has recovered all of its losses from the week before and then some.

CAPS member Biotechfreak was expecting big things from the biotech, and notes it is awaiting more drug approvals in the first half of this year.

Anika Therapeutics has tremendous upside Potential in the near term . Anika awaiting 4 FDA approvals in the 1H 2011 .The Biotech Company is profitable and cash flow positive . Anika is definitely one of the best Pick in the Biotech sector.

You can add the stock to the Fool's free portfolio tracker and have all the Foolish news and analysis compiled in one place to keep an eye on its progress.

All hot and bothered
Junior gold miner Brigus Gold inched closer to going live with its Black Fox mine in Ontario, reporting high grade assay results while also continuing to put in place the infrastructure necessary for the mine to be operational. It has new management in place, has been hiring an underground mining team since the start of the year, and expects to be fully staffed when the mine opens sometime around the middle of the year.

It's a good time to become a gold producer, with prices soaring on Mideast unrest. Yet Brigus smartly became an unhedged miner at the end of last year giving it the potential to be a possible takeover target. Some see it as a top gold play this year, putting it in the same class as Alexco Resource (NYSE: AXU  ) and Rubicon Minerals (NYSE: RBY  ) .

CAPS member jwebbzor says to expect Brigus to be standing on the sidelines of explosive gold growth no more.

Black Fox mine contains a "probable" 1,330,000 ounces of gold. Brigus has been left out of the gold bull market thus far, it is only a matter of time until this junior miner blows up. Personally I'm buying it and holding it for the long run.

While it's a play that still has time to work out, you can dig up other nuggets of insight on the Brigus Gold CAPS page then add it to your watchlist to keep tabs on its progress.

A precision investment
Still struggling from guilt by association with a wayward affiliate, Chinese wastewater treatment company Duoyuan Global Water is also suffering from an excess of bearish sentiment that surrounds Chinese small cap stocks. In particular, Duoyuan, RINO International, and China Valve Technology (Nasdaq: CVVT  ) have served to cast a sewage-like stench on water quality and conservation companies there.

CAPS member cheaply thinks the fallout from the mushroom cloud of doubt has fallen unjustly on Duoyuan and he expects it to recover eventually.

Call me crazy, but I think the Chinese small caps will make an eventual comeback. Unfortunately I am not a seer, so I am not sure when that will be. But this one in particular has been beaten down too much, for no good reason I can find. With a decent P/E and good fundamentals it is chaep right now, and the future should show some solid gains. Problem with my theory is that it may take a while...

You won't be wasting your time by adding your own thoughts on the Duoyuan Global Water CAPS page.

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.

The Fool owns shares of Rubicon Minerals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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 (2) | Recommend This Article (13)

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 March 02, 2011, at 2:08 PM, Straightener wrote:

    I, too, am investing in DGW, and have added some to my position in the past few weeks' volatility of the stock. They have a good auditor (Grant Thornton), good overall numbers, and I feel that whatever happens with the Chinese economy, they will still have to spend money on infrastructure, especially for clean drinking water, of which there is a greater demand every day.

  • Report this Comment On March 02, 2011, at 4:26 PM, tunstavurn wrote:

    Whats your thoughts on the pending patent suit with Genzyme filed in July?

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