Top-Rated Stocks the Leaders Loathe

Momentum investors love to back companies with 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. When one of our All-Star players -- those whose stock-picking prowess places them in at least the 80th percentile of our community -- sours on a top-rated stock, maybe we should take notice. Perhaps the player's found a chink in that highflier's armor or a question mark in its financial footnotes. Or maybe the player's just following a hunch. And that's why these tables aren't lists of stocks to buy or sell -- just starting points for further research.

Here's a list of stocks that some All-Stars have recently spurned:

On average, 98% of the CAPS investors rating these companies think they'll outperform the market. So what might have turned some of CAPS' top players against these otherwise widely admired companies?

Friends in high places
Having your local government own about a third of your stock means the heavy hand of the state has some highly vested interests in your success. Governments can pave the way for you to grow and ensure that no interlopers will stand in your way. Such are the good graces in which Brazilian oil and gas exploration company Petrobras Brasileiro finds itself. The government there owns 64% of the company, and despite a law that supposedly allows competition, the company estimated in its last available annual report that it had a 98% market share in Brazil's oil production and 94% of the natural gas market.

Last November, the Motley Fool Income Investor recommendation also announced that at its Tupi oilfield, it had made one of the largest oil discoveries in decades. The Tupi field holds 5 billion to 8 billion barrels of oil equivalent. This is possibly a lucrative find for Petrobras, which owns a 65% stake in the discovery. However, the find also sits under 2,000 meters of water and another 5,000 meters of sand, rock, and salt, so the oil may also be very expensive to recover. Yet with oil prices at the $100-per-barrel level again, every incentive exists to go forward. Add in another possibly Tupi-sized find off the coast of Brazil, and Petrobras may help the country surpass Mexico and Venezuela as Latin America's largest oil producer.

So why might some of the best CAPS investors want to bet against the oil and gas markets? It's not for a lack of understanding the staying power that oil prices have enjoyed or the benefit of being a de facto government monopoly. In fact, few CAPS investors have bet against the distributor. Of the 1,300-plus investors who have rated Petrobras, only 17 think it will underperform.

CAPS player dustbusterz, for example, wrote last December that any strength in oil will be short-lived and that other factors will weigh in on the price. As a result, this player says, Petrobras and other oil companies will then start to see their share prices sag: "[I] believe oil has been well over hyped the past year or so, and don't get me wrong, its done pretty well during that period. [But] oil is starting to falter price wise and [I] believe the stocks in this entire sector will languish for a while before the next round of bullishness takes hold."

That's similar to the feelings that CAPS All-Star lovesaves expressed about a month earlier. This participant sees money moving away from all capital markets soon, leaving Petrobras to suffer.

Yet more representative of CAPS investors' feelings is probably All-Star Niksurfs, who noted in late January all the fingers Petrobras has in Brazil's pie, as well as the demand that's pushing Brazil's economy higher: "Only reason to own this, they are the 800lb Gorilla for power in their marketplace. Power, rail, vertically integrated what's not to like. Great play on the expanding demand within South America."

Make lemonade from lemons
We've seen some of these companies move in the direction that our All-Stars have said they would, but Motley Fool CAPS is more than what our All-Stars think. 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!