Top-Rated Stocks the Leaders Loathe

Momentum investors are stock players who get behind companies that have the wind in their sails. Contrarian investors typically pick up the cigar butts the market has tossed aside. So what do you call investors who turn against winners? Sourpusses? Shorts?

Over on Motley Fool CAPS, we sometimes call them the savviest investors around. Not only does the 70,000-strong investor-intelligence community rate thousands of stocks every day, but the players themselves get rated, too. The best of the lot -- what CAPS calls All-Stars -- consistently outperform their peers over time and are assigned ratings of 80 or greater.

When an All-Star player sours on a top-rated stock, perhaps we should take notice. Maybe a chink in the highflier's armor has been uncovered. It could be the player has found a question mark in the footnotes of the company's financial statement. Or maybe it's just a hunch. That's why we say these tables are not lists of stocks to buy or sell, but rather starting points for further research. With about 10,000 stocks in the CAPS universe to choose from, this list can drastically whittle down that number. Read the pitches for or against a stock, and then dive into the financials.

Here's a list of stocks that some All-Stars have given the thumbs-down to.

More than 4,100 investors have rated these stocks, and an average of 97% of them are bullish on their prospects. The numbers are similar among All-Stars. So what might have turned some of CAPS' top players against these otherwise widely admired companies?

Fertilizer for growth or a dung heap?
Between demand for alternative fuels increasing the need for fertilizer and emerging markets creating a burgeoning need for foods and fuel, companies like Potash and Monsanto have benefited. Potash in particular has had a tremendous run. After a 32% rise the year before, some believed that it was due for a pullback, but the subsequent performance underscores why it's often smart to let your winners run.

Has the price of fertilizer gotten too expensive along with Potash's stock price? That's the reasoning behind ARetirar's thumbs-down.

Fertilizer has had a huge run up. But I've heard from someone who knows that it has become so expensive that farmers are changing the crops they plant, to minimize its use.

However, fellow All-Star TheGarcipian thinks emerging market demand will outweigh those considerations.

China & India are going to be setting the new demand curves on the world stage for agricultural products, especially considering that so many Chinese will be moving into the middle class over the next 3-5 years and will be demanding new & improved foods and food sources, better pricing, competitive agricultural processes, and improved time-to-market conditions. In looking at the financials of POT, I think it is in a better position than its competitor MOS, though both should benefit from China's influence. Specifically, I like their profit & operating margins (20% and 28%, resp.), RoA (11.3%), RoE (23%), and that their Revenue ($4B) is greater than one-ninth their Market Cap ($27.7B) (that's just an internal number I use myself to gauge companies on a relative basis).

He does have some reservations; you can read his entire bull pitch by clicking here.

Make lemonade from lemons
We know both sides here, but Motley Fool CAPS is more than what some pros think, even if they're All-Stars. It's where we invite you to share your thoughts and insights and add your voice to the debate. Go ahead, have your say. We're eagerly waiting!