When it comes to investing in the stock market, it pays to be skeptical. Not only should you not believe everything the analysts tell you, but you often have to discount what the companies are telling you, too.

Going against the crowd can pay off handsomely. Some of the market's legendary investors have been contrarians: Benjamin Graham, Warren Buffett, John Neff, and Marty Whitman. Like baseball's greatest place hitter, "Wee Willie" Keeler, contrarians "hit 'em where they ain't."

When the crowd abhors a stock, a contrarian wants to look more closely at it. Similarly, when the masses crowd into one, the skeptical thinker believes it's time to move on.

A new breed of contrarian
Today, I'm looking at a new breed of contrarian: the Motley Fool CAPS "skeptic." Skeptics don't think like most investors. They're willing to see the downside potential of a stock, as well as the upside. CAPS skeptics have rated more stocks as underperforming the market than outperforming it. Being a top-rated CAPS player means they're right far more often than not, so when they mark a stock to outperform, perhaps we ought to take notice.

Here are some recent picks from five of the top CAPS skeptics:


CAPS Rating (Out of 5)


Player Rating





Walgreen (NYSE:WAG)




Corning (NYSE:GLW)




Bolt Technology (NYSE:BTJ)




GameStop (NYSE:GME)




The stocks above are not automatic buys, just as a list of the players' worst stocks would not be a list of stocks to short. This list of favorites requires a little more thinking and drilling down into the financial statements. But it's a place to start.

Through the looking glass
It's got to be a morale booster for Corning that one of its prime customers, Samsung, is back on top in flat-panel TV sales (at least for the moment) after having lost the crown to low-priced leader Vizio a month back. Yet when it comes to LCD TVs, it's actually Sharp, another Corning customer, that has the lead.

While flat-panel TV screens are currently where it's at for Corning, it is always reinventing itself, as CAPS investor TheGrtGdOM notes. Its fiber optic division still plays a large role in its fortunes, and perhaps solar energy will be its next transformation.

Corning's core businesses will continue to pick up steam ... but the [major] reason to pick this company has been its continued ability to recognize the next new market and reinvent itself for it. It went from a sedate housewares company to the overpriced darling of [telecom] supplies. Now it has created new markets for new sorts of fiber optic cables while becoming the go-to company for flat panel displays for many of the majors. All well and good. And with a PEG well below the average for the subindustry (1.3 to 1.7), a low debt to equity (0.2 [vs.] 3.6 subindustry [average]) and actually even paying a dividend enough to pick it. But they are not stopping there. Next for them is the rapidly growing solar market and with Dow [Chemical] (NYSE:DOW) (via the jointly owned Dow Corning) they have developed a less expensive silicon feedstock for solar cells. ... Let's face it the pure solar plays are well overpriced and overhyped ... too risky. [Corning] (and similarly Applied Materials (NASDAQ:AMAT)) will just use that solar business line to expand already successful businesses. ...

They see future needs and they are there to supply for them. Housewares to [telecom] cables to flat panels to solar ... they anticipate and are there.

Seeing past the obvious
Contrarians try to see past the headlines. They know that just beyond the wrack and ruin of the storm clouds lies a shimmering morning. Conversely, the sun can't shine forever, though the crowds may think the green grass and blue skies go on and on.

Whatever the weather, drop by CAPS and tell us which stocks are your favorite contrarian picks.

GameStop is a recommendation of Motley Fool Stock Advisor. Dow Chemical is a recommendation of Motley Fool Income Investor. Any of the Fool's investment services are available risk-free for 30 days.

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