Piggybacking on the picks of great investors and money managers can often lead to big rewards -- especially when the stocks in question are beaten down. If Warren Buffett's buying railroads, perhaps you should look there, too. Does Bill Miller think financial stocks are beaten down? Maybe investigating more closely will help improve your own results.

Over on Motley Fool CAPS, our top-rated All-Star players represent the best 20% of our more than 80,000 professional and novice investors. I'm looking among them for those who've chosen one- and two-star stocks to outperform the market. The majority of CAPS investors may consider these stocks losers, but if our ace contrarians think otherwise, these picks might be worth a look.

These five low-rated stocks recently got the nod from the cream of our CAPS investors:

Company

CAPS Rating

1-Yr Return

CAPS All-Star

Player Rating

Willis Lease Finance (Nasdaq: WLFC)

**

15.6%

patelk10

98.86

Regeneron Pharmaceuticals (Nasdaq: REGN)

*

11.8%

fransgeraedts

99.87

Delta Air Lines (NYSE: DAL)

*

-35.4%*

BikeYes

89.79

Steak n Shake (NYSE: SNS)

*

(43.1%)

TMFSmashy

99.55

SLM (NYSE: SLM)

*

(63.9%)

senkihazi

99.50

*Delta emerged from bankruptcy on May 3, 2007.

Typically, there's a low-rated stock that's also enjoyed a large one-year run-up in its stock price that leaves me leery of considering it as a possible investment. Not that stocks can't continue to run, but their high valuations -- even with their low ratings -- leave me a little cold. This week, the run-up is by Willis Lease, a company that buys and sells jet engines that it leases to commercial air carriers, manufacturers, and overhaul and repair outfits, but its run-up isn't so spectacular that I'd completely rule out a further climb.

Go elf yourself
Yet it might be the large decline in Sallie Mae's shares that make its stock seem particularly attractive today. After riding high from a proposed buyout by a group of investors that included Bank of America (NYSE: BAC) and JPMorgan Chase (NYSE: JPM), the student loan lender crashed and burned when it got expelled as a result of the credit crunch. The lender has installed a new chairman but has controversially decided to keep Al Lord on as CEO, despite his handling of the buyout and the ensuing ruffled feathers among analysts and investors.

The appointment of a stabilizing force to the chairman's position may help SLM graduate to the next level, particularly as it faces higher lending costs and a self-imposed rigidity on new government-backed and private student loans.

Of course, not everyone is embittered by Lord's tenure. CAPS All-Star 1stock1, with a 99.43 player rating, sees the CEO as a bit of fresh air where too many executives are more concerned about what people think rather than how their business is performing.

I might be early with this outperform call. Who knows how long the panic will last? But the stock has been hit HARD. Credit markets will unfreeze eventually, meanwhile education costs are climbing as fast as ever, growing population, the demand for student loans isn't going to quit. Panic or no, SLM is here to stay.

Also, their new (old) CEO is a veteran who I believe will turn around some of the recent mistakes. Love his no-nonsense attitude. (I just listened to the infamous conference call). I wish more CEOs would work harder on their business and spend less time sucking up to stupid analysts.

Even with new self-imposed limits, the business of what SLM does is still a lucrative venture, as CAPS player latimerburned realizes from his own situation.

Every month I send these guys a check and will be doing so for the next 18 years. This might not be the bottom, but when I finally pay my loans off it will be substancially higher than it is now. I'm eve[n] tempted to buy a third here in my personal accounts to hedge against my loans.

Finding value under rocks
So there you have it. Five low-rated laggards that have gotten a big endorsement from some of the best and brightest investors in the CAPS community. What do you have to say? If you want to add your two cents, sign up to join the Motley Fool CAPS community, which is 100% free.

Bank of America and JPMorgan are recommendations of Motley Fool Income Investor. Feel the love of getting paid to invest with 30 days of stock analysis free for the asking.

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.