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
|
| Neostem (NYSE: NBS ) |
*****
|
1
|
48%
|
| Procera Networks (NYSE: PKT ) |
****
|
0
|
122%
|
| Telular (Nasdaq: WRLS ) |
*****
|
0
|
18%
|
Source: Yahoo! Finance; Motley Fool CAPS.
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
Neostem realizes the research it's doing takes money. To ensure it has ready capital available to it, it's guaranteed itself a steady stream of revenue by branching out into pharmaceutical drug sales in China. That initiative alone generated $69 million in revenues last year for the stem cell researcher.
From StemCells (Nasdaq: STEM ) to Geron (Nasdaq: GERN ) , there are plenty of players seeking the Holy Grail of stem cell nirvana. While a number of them are pure plays focusing solely on their research, for others like Geron stem cell research is but one of many disciplines it's developing. The risk, of course, is that by having multiple revenue streams, they become distracted by trying to hold the reins of too many businesses and so lose their way. The upside is they can continue to fund their true work.
Only a few dozen CAPS members have weighed in on Neostem, but only one so far thinks it won't outperform the broad market averages. All of the All-Stars, however, are unanimous that it can beat the Street, and so far this year, the stem cell researcher's stock is up 43%.
Let us know in the comments section below, or on the Neostem CAPS page, whether you think the company's business plan is a bit of divine inspiration.
All hot and bothered
With President Obama committing to spending $18 billion to bring mobile broadband to rural America, ISPs are building the networks necessary to improve the deployment of the infrastructure necessary to reach the millions American homes and businesses currently without access. The FCC blessed Frontier Communications' (NYSE: FTR ) receipt of 4.8 million landlines from Verizon last year as a means of facilitating the expansion of broadband, and Procera Networks is using its intelligent policy enforcement technology to become the central intelligence point by small- to mid-size ISPs building out in rural.
Its efforts have been recognized by the market, and with shares trading 50% higher since the start of 2011, the support the 96% of the CAPS members rating the broadband support service specialist have bestowed on it has been validated.
Dial up your own opinion on the Procera Networks CAPS page, or add it to your watchlist if you think there may be a disconnect from reality at play here.
Don't be alarmed
The concept behind Telular's business is simple: Use the growing expansion and popularity of mobile communications to offer monitoring services for individuals and businesses. It estimates that it owns 20% to 30% of the cellular alarm communicator market, and CAPS member codyklein has written that with a conservative management team building up a clean balance sheet, it is poised to capture even further gains.
It's a formula that obviously even hedge fund operator Whitney Tilson finds attractive, as he apparently added Telular to his portfolio recently. The rest of Wall Street has neglected this little-known player among more high-profile rivals like Honeywell (NYSE: HON ) . That gives investors an opportunity to move in before more institutions follow Tilson's lead.
Add Telular 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.
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