Successful investing requires you to think independently and stick to your convictions. That's hard enough with stocks that are generally popular -- after all, in the stock market, there's a seller for every buyer. But it gets even tougher with stocks that can't seem to find good press or bullish investors anywhere. Of course, defying popular opinion has led many contrarian investors to great returns.
In that spirit, I've headed to Motley Fool CAPS to dig up some unloved stocks that have delivered big gains to shareholders over the past month. Our community of 105,000 investors has put each of these companies on the bottom two rungs of the CAPS rating scale:
|
Stock |
One-Month Return |
One-Year Return |
Current CAPS Rating |
|---|---|---|---|
|
Pacific Ethanol |
52.8% |
(61.1%) |
* |
|
CompuCredit |
27.5% |
(71.5%) |
** |
|
SLM Corp. |
25.3% |
(60.2%) |
** |
|
Clear Channel Communications |
22.3% |
(7.0%) |
** |
|
Tiffany & Co. |
10.9% |
(8.6%) |
** |
|
Uranium Energy |
10.9% |
(54.4%) |
* |
|
Doral Financial |
10.8% |
(15.1%) |
* |
Data provided by Motley Fool CAPS as of May 21.
Now, given CAPS' knack for accurately gauging winners and losers, I'm not recommending that you run out and buy these stocks! An index set up to short CAPS' least-liked stocks has outperformed nearly 98% of all other CAPS players. That said, CAPS players have proved overly negative on some high-performing stocks. Are any of the stocks in the table above the same sort of undercover rockets?
Providing the pep
In a time when the economy is struggling and the prices for precious metals are rising, you might expect the jewelry business to take a hit. Sure, folks like Jay-Z can still afford some bling, but Joe Public may be a little more cautious about icing himself out when he's not sure that he can cover his mortgage payments.
Investors were apparently anticipating that this situation would put a hurting on jewelry kingpin Tiffany, as the stock dropped as much as 40% between the fall of 2007 and early 2008. The company has proven more resilient than expected, though. In the all-important fourth quarter -- also known as the Christmas season -- the company managed to post 10% revenue growth and operating earnings that came in above the hurdle set by Wall Street.
More recently, Tiffany continued to make its investors smile by boosting its dividend 13% -- the company's sixth straight year of dividend growth -- and by giving preliminary guidance that first-quarter earnings will be better than expected.
Combing CAPS
The 6.2-to-1 bull-to-bear ratio for Tiffany on CAPS may not seem particularly bearish, but the ratio is low enough to earn the stock just two stars out of a possible five. Most Tiffany bears have focused on the weak economy and the myriad problems facing U.S. consumers. By and large, though, the bulls have taken a view of the bigger picture, and have highlighted Tiffany's strong brand and global growth.
CAPS player scar72 recently gave Tiffany's stock the thumbs-up and reasoned:
This company has a heavy presence in Asia, and derives much of its sales from overseas. With the economies in these areas producing upwardly mobile classes [Tiffany] is positioned to do well. As the dollar weakens shopping at [Tiffany] becomes cheaper for those shopping in alternative currencies. The only headwind here is commodity pricing increasing material costs.
So what's your take? Is there good reason to get more bullish on Tiffany right now or are its sunnier days numbered? Head over to CAPS and let the community of more than 105,000 Fools know what you think. While you're there you can start your research on any of the other stocks listed above or any of the 5,600-plus stocks on CAPS.
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