Part of being a successful investor is being able to think independently and having a strong enough conviction to stick with your ideas. This can be a difficult enough task when you're looking at a stock that the media and analysts generally like -- after all, in the stock market, there's a seller for every buyer -- but it becomes a far thornier proposition when you're looking at a stock that can't seem to find good press or bullish investors anywhere.

Of course, going against popular opinion has also led to great returns for many contrarian investors.

In that spirit, I've headed to the Motley Fool CAPS community to dig up some unloved stocks that have delivered big gains to shareholders over the past month. Our community of investors had given each of these companies a one-star rating -- the lowest possible -- just 30 days ago:


30-Day Return

One-Year Return

Current CAPS Rating (out of 5)

Pacific Ethanol (NASDAQ:PEIX)




Centex (NYSE:CTX)




Ryland Group (NYSE:RYL)




Standard Pacific (NYSE:SPF)




Aventine Renewable Energy (NYSE:AVR)




VeraSun Energy (NYSE:VSE)




Fremont General (NYSE:FMT)




Data from Motley Fool CAPS as of Dec. 21.

Now, I'm not recommending that you run out and buy these stocks! Their low ratings are a big, flashing red light. CAPS players have been pretty adept at picking out good stocks, and even better at pointing out bad stocks to avoid. In fact, an index set up to short the least-liked stocks in CAPS has outperformed more than 99% of all other CAPS players.

In other words, most stocks that are rated with one star in CAPS are likely to underperform. However, CAPS players aren't perfect. They've been overly negative on stocks such as Crocs and DryShips, both of which have delivered seriously impressive returns to their investors. So the question is whether any of the stocks in that table might be one of those undercover rockets.

Do research? You're kidding!
That's right, the best way to figure out whether any of these stocks is worth considering for your portfolio (real or CAPS) is to roll up those sleeves and dig in a bit. What we're looking for here are stocks that have good fundamentals despite their lack of popularity -- a profitable business, good management, and some decent growth prospects.

This week, the group falls into two buckets -- housing and ethanol. Over the past few incarnations of this column, I've reiterated that I'm still staying away from the homebuilders. But what about ethanol?

The whole ethanol patch has been on a bull run lately, as continued support from Washington and some deals in the industry have gotten investors fired up. Not everyone is quite so bullish, though. CAPS player abitarecatania, a Pacific Ethanol bear, quoted Berkshire Hathaway's Charlie Munger, who said: "Running cars on corn is about the stupidest thing I ever heard of." I'm not sure I can agree -- I've heard a lot of stupid things in my life -- but ethanol is very low on my list of favorite sources of renewable energy.

However, a bigger issue I have with ethanol stocks, and the broader renewable energy group, is that there is extremely low visibility into what the future may hold for this industry. The race for these to become mainstream energy sources is still in its very early stages, and it's far from determined which -- biofuels, solar, wind, etc. -- will be the winner, if there's even a winner at all.

No doubt many would call me shortsighted for this view. Well, then, just call me Mr. Magoo. I certainly cheer on the advent of a readily available, price-competitive alternative energy source, but under my definition of investing, the stocks involved in alternative energy still fall into the speculation camp.

So what's your take on the ethanol stocks? Head over to CAPS and let the community of more than 78,000 Fools know what you think. While you're there, you can start your research on any of the other stocks listed above -- or any of the 5,000-plus stocks on CAPS.

More CAPS Foolishness:

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The Motley Fool owns shares of Berkshire Hathaway, which is an Inside Value and Stock Advisor recommendation.

Fool contributor Matt Koppenheffer didn't see these particular moves coming, but he's rarely surprised at Mr. Market's general tomfoolery. You can check out Matt's CAPS portfolio here, or visit his blog. He does not own shares of any of the companies mentioned. The Fool's disclosure policy is never going to give you up, it's never going to let you down, and it's definitely never going to run around and desert you.