Short-sellers and hedge funds may be shadowy, but sometimes they are the smartest guys in the room. They've done their homework, and they're willing to bet their capital against the crowd -- an investing strategy that can be as lucrative as it is contrarian.

On Motley Fool CAPS, we've also got leading analysts who find the chinks in a company's armor and correctly call its fall. Our "Underdogs" have earned 100 or more CAPS points by correctly predicting that one or more stocks would underperform the market. However, we're going to focus on the stocks these top members expect will outperform the market. If these CAPS investors have scored big by correctly predicting which stocks will fail, it may be worth our while to see which others they think will succeed.

Not every short-sale goes as planned, making shorting a risky proposition. Stock prices can be irrational longer than you have money to stay in the game. So don't use this as a list of stocks to sell or buy -- just the launching pad for further research.

Rockin' the Bakken
Recently the governor of North Dakota said he's given up on guessing how big the state's oil industry could get. "I'm done guessing," he said. "I've been so wrong in the past."

With good reason. Analysts are expecting the Bakken and Three Forks regions to continue being the key to domestic production with regulators in North Dakota calling for it to double to more than a million barrels a day by 2015. Harold Hamm, chairman and CEO of Continental Resources (NYSE: CLR), thinks they're in the ballpark, but are probably a little low. The state is second only to Texas in oil production as the Bakken formation has produced a major booming economy there.

While Continental was one of the first exploration companies to seize on the region's potential, there's no end to the list of drillers now digging deep into the rock to get at its resources. Kodiak Oil & Gas (NYSE: KOG) is but one with a focus on the Williston Basin, with six wells in operation and having just taken delivery of a seventh.

Through a program of acquisitions, Kodiak is expanding its acreage and production. In the first quarter of this year, oil sales volume surged 458% in large part because of its acquisitions, but also increased production at its legacy properties. Of the 721.2 MBbls increase in sales volume, 43% was related to acquisitions, which means it's getting the lion's share from its existing properties. Similarly, its natural gas production is benefiting from acquisitions, but legacy properties are still pulling their weight.

As crowded as the field is, Kodiak should be on track to witness strong growth in the next couple of years. Its stock has pulled back over 25% from recent highs, making it an attractive investment candidate. The market seems to be discounting much of the potential, particularly since just 41% of its 168,400 acres are developed. Weak oil and gas prices may have contributed to the decline, which has also pushed down shares of Continental, Whiting Petroleum, and Hess, but it's almost assured long-term trends will push them all higher again.

The CAPS community is eying the potential, and 95% of the 767 members weighing in on the oil and gas play see it beating the market indexes from here. I've rated it to outperform as well, but you can follow its progress by adding Kodiak to the Fool's personalized stock-tracking service, and let us know in the comments section below or on the Kodiak Oil & Gas CAPS page whether it will soon rise with industry prices.

Running the table?
Biotech Dendreon (Nasdaq: DNDN) is definitely behind the eight ball after Johnson & Johnson (NYSE: JNJ) reported positive clinical data for a prostate cancer drug that would compete with Provenge. While the news sent Dendreon's shares lower the other day, the stock has been dropping steadily for some time now.

The biotech is dealing with the growing realization that Provenge is experiencing only modest growth and may never be the blockbuster once hoped for. Its first-quarter results were improved, but continued failure to gain real traction sent the biotech's shares plummeting 25%. Now there's the very real probability that if and when Zytiga from J&J hits the market, Dendreon's share will evaporate.

It always had a limited window of opportunity after delays getting Provenge to market; now that window appears to be slamming shut a lot more decisively. CAPS member bIlluminati isn't hopeful at all for any rebound, noting that Provenge "is very expensive, compared to its benefits, and its other products are not as promising."

There is the hope that Provenge will be used in conjunction with Zytiga and other next-gen therapies, and Dendreon is currently running trials to that end. Also, not everyone is convinced J&J's trial was as successful as the headlines claimed. Zytiga's expanded indication may not be the slam dunk everyone is assuming.

Add Dendreon to the Fool's free portfolio tracker and tell me on the Dendreon CAPS page whether the markets have made much ado about nothing over the biotech's rival and we'll see it snap back soon when that realization sets in.

There's no need to fear...
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