All-Star Stocks

Win some or lose some, we've all got an opinion about which stocks are rockets and which are dogs. If we could invest like Peter Lynch or Mohnish Pabrai, we'd probably have a lot more companies in our win column than on the loss side of the ledger. Warren Buffett began buying railroads last year and just about any company that ran on tracks came into play.

So when top-notch investors back a stock, you might want to give it more consideration. Over on the investor collaboration site Motley Fool CAPS, we have just such a capability. CAPS All-Stars, investors who outperform their peers consistently over time and who have achieved a player rating of 80 or better, will sometimes back a stock that others think is a dog. Considering their track records, we might want to look a little more closely at their selections.

Here are five companies that have been marked down by some investors, but have unanimous All-Star backing:

Of course, this isn't a list of stocks to buy or sell, but rather a starting point for your own research and analysis.

A resourceful driller
An article about another oil and gas company might not be so interesting to read, but Denbury Resources makes up for that because of the unique way it extracts the oil from its Gulf Coast properties. Using its Jackson Dome carbon dioxide field located in Jackson, Miss. -- the only such field east of the Mississippi River -- it extracts oil from rock formations by pumping the gas into the wells. The CO2 acts a bit like a solvent, freeing the oil from the rock as it passes through.

It's not a new technique, but coupled with Denbury's own additional techniques, it was able to report another year of record revenue and earnings. The unique process for extracting those extra drops of oil from a well produced fourth-quarter net income of $106 million, some 92% higher than last year. Driven by record production and higher oil prices, the company has seen its shares more than double over the past year. There's very little competition for Denbury in the region it operates in because there are no other CO2 fields to tap into. Yet it's found willing customers in Marathon Oil (NYSE: MRO), Hunt Crude Oil, and Sunoco (NYSE: SUN).

Nearly half the investors weighing in on Denbury over at CAPS are All-Stars, and as we've pointed out, none think this stock is ready to underperform the market, though a handful of other investors do.

It has been Denbury's distinctive method for extracting oil that has been attracting investors to it, as well as its ability to go back into older wells that other companies have given up on. That's what attracted CAPS player amoryblaine to Denbury:

Although extracting oil with C02 isn't a new process, Denbury is making great use of it by acquiring mineral rights to deposits that were abandoned prior to C02 use. They should be able to exploit many areas that have been neglected in the past few decades, prior to ... C02 implementation. I think their potential yields will far exceed operating costs and management looks steady. What do y'all think?

Similarly, CandGenie likes that many of the properties Denbury acquires were bought cheaply, and in light of higher fuel prices it is able to exploit them to the fullest.

[Denbury] is just beginning to reap the production numbers in [barrels of oil per day] from the CO2 recovery which has steadily increased since the [beginning] of this operation. The key to this success is that these fields were [initially acquired] for a song along with the CO2 source. The industry standard is that 40% of the oil in these fields is still in place.

An all-star act
Although a few CAPS investors have bet against the house here, we haven't yet heard from you. Why not head over to Motley Fool CAPS right now and let us know what you think about these and your other favorite investments. It's completely free, and putting your head together with 84,000 other investors might help you uncover the next all-star stock.