By
Tim Hanson
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More Articles
October 6, 2006
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Welcome back to another installment of "5 More Top Stocks." If you missed our firsttwo iterations, please accept my greetings and salutations. If you're a regular reader, well, Mom says hi.
Moving on .
Before we get to today's list, let's revisit the three assumptions we're working under:
- Underfollowed small-cap stocks offer great returns.
- Wall Street is covering fewer stocks than ever before, and that makes now a great time to start looking for mispriced small caps.
- Small caps can be dangerous when they're underfollowed, since there's not a lot to go on when you're researching prospective investments.
Our mission in this column -- akin to our mission in Motley Fool Hidden Gems -- is to identify promising small-cap companies that three or fewer analysts follow. To do this, we employ Motley Fool CAPS, a brand-new community intelligence database (still in beta testing) that asks amateur and professional investors alike to rate stocks either "outperform" or "underperform." In turn, each investor is rated, as is each stock.
The end result is that while only huge companies such as Cisco Systems (Nasdaq: CSCO ) and Sun Microsystems (Nasdaq: SUNW ) have more than 15 analysts following them, CAPS has the potential to cover even micro caps with the same depth.
Drum roll, please .
So, without further ado, here are five five-star CAPS stocks that three or fewer professional analysts are covering.
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Company
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CAPS Investors Covering
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Analysts Covering
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Current Analyst Consensus*
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ENGlobal (AMEX: ENG )
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16
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2
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Strong Buy
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Schnitzer Steel (Nasdaq: SCHN )
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14
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2
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Weak Buy
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Medical Properties Trust (NYSE: MPW )
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10
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2
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Moderate Buy
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Hurco (Nasdaq: HURC )
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87
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1
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Strong Buy
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GFI Group (Nasdaq: GFIG )
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16
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3
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Weak Buy
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*Data from Thomson Financial.
As always, these stocks are offered not as formal recommendations, but rather as ideas worth researching further. And if you're interested, I'll say that tiny $150 million Hurco has already developed quite a following within Hidden Gems and the CAPS community.
Interested?
If you'd like to learn more about these stocks or offer your own insights on them or any other stock, just click here to join CAPS. It's totally free and (potentially) totally revolutionary.
Tim Hanson does not own shares of any company mentioned. The Fool's disclosure policy assures you that no stocks were harmed in the penning of this article.
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