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

A-Power Energy Generation Systems (Nasdaq: APWR  )

*****

4

163%

National Bank of Greece (NYSE: NBG  )

****

3

NA

RAIT Financial Trust (NYSE: RAS  )

*****

2

NA

Sources: 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
Unlike American Superconductor (Nasdaq: AMSC  ) , which has pursued a business model of selling designs for wind power generation systems and supplying their electrical components, A-Power Energy Generation Systems has preferred to be the manufacturer and that position has worked against it in the current climate.

But management has added to the confusion by first issuing a statement during a conference call last year that it was dissatisfied with General Electric (NYSE: GE  ) and its provision of gearboxes for wind turbines, only to turn around and say it's really quite happy with them. Now GE is suing A-Power for breach of contract and seeking arbitration.

A-Power's shares have fallen more than 50% over the past year, but despite entering the wind power market at a bad time -- many turbine manufacturers had a really poor 2010 (aside from American Superconductor) -- business prospects remain hopeful. China's going to be a key driver of the industry for years, and A-Power's operations are beyond just wind anyway. It just signed two contracts for biomass power plants, one valued at $30 million, the other at $19 million.

With its depressed stock price, CAPS member HmmIn sees the risk-reward ratio skewed in A-Power's favor, and with 97% of the more than 1,100 CAPS members rating it to outperform the market, it seems there's every confidence it will be able to power up again. Let us know on the A-Power Energy Generation Systems CAPS page whether you think it has the wind at its back again.

All hot and bothered
Funny how National Bank of Greece is looking like a solid choice these days. Considering how the country was viewed as a continental financial basket case just last year, the bank was seen as perhaps the most likely to feel the brunt of whatever collapse was imminent. Greece got bailed out, and now all eyes are on the Iberian peninsula, with Portugal seen as the next domino in line to fall.

Yet while the country is a ruinous mess -- its prime minister couldn't get austerity measures passed and resigned, meaning it will probably be heading to the EU for a handout, too -- at least some of its banks are on firmer financial footing. Moody's didn't downgrade Banco Santander (NYSE: STD  ) or BBVA (NYSE: BBVA  ) , as it did 30 other banks, and like National Bank of Greece, their share prices have been much stronger this year.

Highly rated CAPS All-Star member kkconway says the Greek bank will continue to improve, as much of its exposure is well away from the mainland's problems.

Per Fool 'par excellance' Tim Hansen, (or was it Nathan P?), NBG makes 40% of it's income from Turkey, and besides, Greeks have far less personal debt than Americans. This is fishin' in a barrel with all the water out. Too easy, but not for the impatient type.

Deposit your views on the National Bank of Greece CAPS page and add it to your watchlist if it's still too risky for your real dollars.

In real estate we trust
Rather than collapse, as many people, including myself, anticipated, the U.S. commercial real estate market turned in its third-strongest annual returns over the last decade, according to the industry watchers at U.K.-based IPD, with investment returns growing 14.2%. While all areas saw double-digit improvements, the industrial market was weakest at 10.4% and the residential apartment segment was strongest with a 19.2% return, showing just how dismal the housing market remains in the country.

That's got to be good news for RAIT Financial Trust, which has 20% of its portfolio in the retail sector (up 14.9%, according to IPD), but more than two-thirds of its investments is in multifamily properties.

CAPS member WiseChoice4u2 finds that REITs like RAIT will improve now that they've been able to hang on through the worst of it:

The longer these REITS survive the greater their possiblity of survival. And the reward could be large. So I dedicate a small percentage of the whole to REITS, trying to pick out the best possiblities going forward.

Add RAIT to the Fool's free portfolio tracker and have all the Foolish news and analysis about it aggregated for you in one place.

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 National Bank of Greece SA. 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 (12)

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 30, 2011, at 9:08 AM, pebbles444 wrote:

    If this might be one of Wall Streets "best hidden stocks" why has it been dropping alot lately when the rest of the market has been going considerably higher?

  • Report this Comment On April 05, 2011, at 11:06 AM, 1saint wrote:

    APWR had a problem with GE and spoke out about the GE gear for the wind mill projects. They were forced to retract their statement last year. But the GE gear is an internal GE known problem and this is why GE is going to acquire Converteam for 3.5 Billion.

    A giant like GE should be ashamed that after knowing the problems they have had, now are going after APWR in attempt to litigate and force their way.

    I hope the truth will com out on day, and people will be smart enough to know the true reason for this Converteam acquisition.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1464836, ~/Articles/ArticleHandler.aspx, 10/25/2014 11:29:50 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement