Wall Street's Best Unknown Stocks

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. 

Company

CAPS Rating (out of 5)

Wall St. Picks

5-Year EPS Growth

Cell Therapeutics (Nasdaq: CTIC  )

***

0

NA

YRC Worldwide (Nasdaq: YRCW  )

***

5

15%

RINO International (Nasdaq: RINO  )

***

4

NA

Source: Yahoo! Finance.

Remember, without 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. 

A utility player
Despite residing in penny stock territory, Cell Therapeutics has global ambitions of growth for its non-Hodgkin's lymphoma therapy pixantrone, even though revenues from Europe comprise a declining percentage of its revenues.

Later this year, Cell Therapeutics plans to file a marketing plan with the European Union. It was recently encouraged by European regulators to include use for children in its application for pixantrone. The situation here at home is murkier, but a contract with Italian drug maker NerPharMa should give investors hope that its appearance before the FDA will have better results.

Revlimid, a blood-cancer treatment from Celgene (Nasdaq: CELG  ) , was found effective in treating relapsed or refractory aggressive NHL. Along with Thalomid and Vidaza, Revlimid accounted for the lion's share of Celgene's $2.7 billion in revenues last year.

Investors think Cell Therapeutics will have similar good returns from pixantrone, and 90% of CAPS members rating the biotech look for it to outperform the broad market averages.

All fun and games
Despite declining for the past few months, the ISM manufacturing index is still in expansion mode. That's shown up in the second-quarter earnings of companies that move goods around the country, like railroad operator CSX (NYSE: CSX  ) and trucker JB Hunt (Nasdaq: JBHT  ) . Even troubled truck company YRC Worldwide was able to turn up the heat from business expansion.

CSX expects growth throughout the year, with domestic industrial production exceeding 3% for the back half of 2010. That gives YRC more time to open the throttle and gain some distance from its financial problems. The improving state of the economy over the past year is evident in the CAPS Road & Rail sector, which grew more than 34%. YRC Worldwide has had a harder go of it, falling 84% and having a dalliance with bankruptcy in that same time period. Still, shares have doubled in the past week (perhaps not so unlikely a feat, when they're trading at pennies on the dollar), and 83% of CAPS members expect the company to continue driving that road.

Kicking it higher
Chinese wastewater treatment specialist RINO International has been acting like a bull in a China shop. Despite a 50% gain in profits recorded last May, and revenue increases matching forecasts, adjusted earnings landed well below analyst expectations, and its share price got gored. The stock is down 11% over the last month, and more than 50% so far this year.

The year has been a mixed bag for pollution control companies. While RINO has fallen sharply, and fellow Chinese water treatment equipment maker Duoyuan Global Water is down almost as much, Westport Innovations (Nasdaq: WPRT  ) is trading nearly 60% higher than where it started 2010.

CAPS member tweetie2010 is looking for growth at a very reasonable price with RINO, as does AjarnMichael, though he admits it's speculative:

Love the recent growth of this stock and believe it still to a good value because I think the growth will continue. I am a bit concerned about the company being hurt by what I believe will be a higher value of China's RMB currency in the future. Speculative play I wouldn't put more than 5% of my portfolio value in.

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.

Try any of our Foolish newsletter services today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.


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