2-Star Stocks Poised to Plunge: Toll Brothers?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, homebuilder Toll Brothers (TOL 5.02%) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Toll Brothers and see what CAPS investors are saying about the stock right now.

Toll Brothers facts

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 52% of the 1,370 members who have rated Toll Brothers believe the stock will underperform the S&P 500 going forward.

Just last week, one of those bears, AygHead, highlighted a key risk facing the company going forward:

[Toll Brothers] is invested in mid to high residences the northeast, outside of Manhattan. While housing is recovering strongly in the south and mid/west area, there is a structural shift from the northeast owing to expensive labor and high business taxes/expenses. There is a shortage of homes, but there is also a shortage on land (which means acquiring new land is $$$). While [Toll Brothers] is very well run, the macro [environment] in the northeast will keep a lid on pricing power and margins. Other homebuilders may fare better.

If you want market-topping returns, you need to protect your portfolio from any undue risk. Luckily, we've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.