5 All-Star Stocks

Win or lose, we've all got an opinion about which stocks are rockets and which are dogs. If we could invest like Peter Lynch or Mohnish Pabrai, we'd probably have a lot more companies in our win column than on the loss side of the ledger. For instance, Warren Buffett began buying railroads last year, and just about any company that ran on tracks came into play for many.

So when top-notch investors back a stock, you might want to give it more consideration. Over on the investor collaboration site Motley Fool CAPS, we can do just that. On CAPS, players who've earned a rating of 80 or better by consistently outperforming their peers are dubbed All-Stars. Sometimes, these ace investors will back a stock that others think is a dog. Considering the All-Stars' track records, we might want to look a little more closely at their selections.

Here are five companies that have been marked down by some investors but enjoy unanimous All-Star backing:

Of course, this isn't a list of stocks to buy and sell. Instead, it should serve as a starting point for your own research and analysis.

A stock in sick bay
With shares having at one point been off more than 50% this year for Inverness Medical, you'd think that trial lawyers would spring from the woodwork like cockroaches, as they have elsewhere. The manufacturer of medical diagnostic products has been on a spending spree, making acquisitions at a torrid pace, so much so that the market seems to be having a difficult time valuing the company. The lawyers are quick to associate a falling stock price with misrepresentation, but when a company is a serial acquirer, it's no longer an apples-to-apples comparison when looking at the financials, and sometimes the market gets wary.

One group of investors who aren't the least bit chary is CAPS All-Stars, who remain unanimously supportive even in the face of a stiff drop in price. Yet they're not alone in their belief that, while Inverness is making a lot of acquisitions, the company will be able to digest them without any heartburn and they will end up being accretive to the bottom line sooner rather than later.

CAPS investor Sangfarmer, for example, believes Inverness will begin to realize efficiencies from its acquisitions that will pay dividends later on.

This firm has been unnecessarily punished as a "serial acquirer" that does not fully recognize its potential. As efficiencies are realized and new products are fully developed, this company will begin to see bottom line results which will reverse the negative image in the markets today. I believe this stock has reached a floor and will only go up from here. The only caveat would be a negative earnings surprise.

That's a view echoed by latimerburned, who also notes management's successful acquisition history. "Growing fast via acquisitions which is a risky business but they are in a great field that is ripe for acquistions. Management team has already built and sold two companies in the past ten years."

It's a strategy that other companies have pulled off in other fields. For example, Motley Fool Hidden Gems recommendation Nuance Communications (Nasdaq: NUAN) is rolling up the voice recognition market under its umbrella, making many acquisitions over the past year, and shares have risen more than 25% in that period.

An all-star act
Although a few CAPS investors have bet against the house here, the All-Stars haven't. We haven't yet heard from you. Why not head over to Motley Fool CAPS now and let us know whether or not you agree with the All-Stars about these and your other favorite investments? It's completely free, and along with the other 97,000 investors there, you may help uncover the next all-star Stock.