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. They're contrarian in that they find more downside potential than upside, but being a top-rated CAPS player means they're right far more often than not, and 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:

Company

CAPS Rating (out of 5)

Skeptic

Player Rating

Finisar (NASDAQ:FNSR)

***

StatsGeeks

100.00

McDermott International (NYSE:MDR)

*****

TDRH

99.99

Quality Systems (NASDAQ:QSII)

*****

TMFMoby

99.90

Carpenter Technology (NYSE:CRS)

*****

AirForceFool

99.84

Amylin Pharmaceuticals (NASDAQ:AMLN)

**

indyjoneses

99.82

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

Keeping its eye on the future
As optical networking outfit Finisar stays under pressure thanks to patent litigation concerns and weak quarterly performance, it looks to its top customer, Cisco (NASDAQ:CSCO), to continue performing well to further its own prospects. Some analysts expect Finisar to do well in the growing 10-gigabyte Ethernet market, an industry which is forecast to quadruple module sales to $655 million by 2010.

It's that market opportunity that top-ranked All-Star Clouseau131 noted at the beginning of the summer when he gave this industry leader the thumbs-up.

Finisar is the world's top provider of high speed optical transceivers. Over the past 10 years, they have proven themselves as the leading innovator in the industry. In 1997, they introduced the first gigabit multimode optical transceiver when everyone else thought it couldn't be done. More recently, they introduced the first 10 gigabit XFP (10 gig small form factor pluggable transceiver). The list of firsts goes on and on.

Along the way, they were able to displace goliath competitors like IBM (transceiver business later purchased by JDS Uniphase (NASDAQ:JDSU)), Agilent, and Infineon (through acquisition). The biggest competitive challenge today is low cost overseas knock-off manufacturers. Finisar is well positioned to compete. In 2001, they acquired a large state of the art manufacturing facility in Malaysia and began the difficult transition to a manufacturing company. Today, that factory is fully operational. It allows Finisar to manufacture products at low cost while protecting IP. Because they don't outsource manufacturing, they don't have to teach potential competitors in China etc. the difficult process of building optical transceivers.

You can read his complete top-rated bull pitch by clicking here. Although Finisar is reviewing its stock-option granting practices and has delayed filing its latest 10-Q with the SEC as a result, that hasn't stopped Finisar bulls from looking beyond the issue to see where the company is heading.

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 will go on and on. Drop by CAPS and tell us which stocks are your favorite contrarian picks.

Quality Systems is a recommendation of Motley Fool Stock Advisor. Getting 30 days of quality market-beating stock picks risk-free is easy if you just click here.

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.