Successful investing requires you to think independently and stick to your convictions. That's hard enough with stocks that are generally popular. After all, in the stock market, there's a seller for every buyer. But it gets even tougher with stocks that can't seem to find good press or bullish investors anywhere. Of course, defying popular opinion has led many contrarian investors to great returns.
In that spirit, I've headed to Motley Fool CAPS to dig up some unloved stocks that have delivered big gains to shareholders over the past month. Our community of investors has put each of these companies on the bottom two rungs of the CAPS rating scale:
|
Stock |
30-Day Return |
One-Year Return |
|
|---|---|---|---|
|
Rambus |
35.9% |
12.8% |
** |
|
KB Home |
27% |
(32%) |
* |
|
Amazon.com |
23.9% |
87.8% |
** |
|
Pacific Sunwear |
18.5% |
(35.7%) |
** |
|
Capital One Financial |
18.3% |
(27.8%) |
* |
|
Morgan Stanley |
18.1% |
(25%) |
** |
|
JPMorgan Chase |
16.1% |
(2.4%) |
** |
Now, given CAPS' knack for accurately gauging winners and losers, I'm not recommending that you run out and buy these stocks! An index set up to short CAPS' least-liked stocks has outperformed more than 96% of all other CAPS players. That said, CAPS players have proved overly negative on some high-performing stocks. Are any of the stocks in the table above the same sort of undercover rockets?
Providing the pep
Is Income Investor pick JPMorgan really making out like a modern day Jesse James? A lot of investors think so, and that's a big part of the reason why the stock is up 16% over the past month. The loot in this case was investment bank Bear Stearns
The timeline at this point is pretty widely known, but the short version is that on March 16 -- with some prodding from the U.S. Federal Reserve -- Bear threw in the towel and fell into the open arms of JPMorgan. The price? A rock-bottom $2 per share, and that came with a $30 billion backstop on Bear's assets from the Fed.
There are certainly some costs. For instance, JPMorgan estimated that it could face up to $6 billion in litigation expenses. However, investors clearly believe that in spite of the potential costs, the deal will be a longer-term boon for JPMorgan. In fact, they like the deal enough that JPMorgan's stock rose modestly a week later when the bank quintupled its offer for Bear.
Combing CAPS
There have been a lot of very highly ranked CAPS players who have been thus far proven wrong on JPMorgan. Though it looks and smells like other banks that have been beaten up, it has held up well so far. Many bears have stuck to their guns, though, and one of CAPS' top players, rwilso01, even went as far as to say in late March that JPMorgan is "going all the way to zero."
The bull side has been far more active lately. While a flood of CAPS members have been attracted to JPMorgan because of the Bear Stearns deal, others have highlighted the core strength of JPMorgan's business and management. Halliday21, for example, called the bank "the most impressive money center bank in the market" and highlighted its CEO Jamie Dimon, claiming he "is doing a fantastic job managing through rough waters."
So what's your take? Is there good reason to get more bullish on JPMorgan right now, or are its winning days numbered? Head over to CAPS and let the community of more than 94,000 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 5,500-plus stocks on CAPS.
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