Piggybacking on the picks of great investors and money managers can lead to big rewards -- especially when the stocks in question are beaten down. If Buffett finds opportunity in bonds, perhaps you should look there, too. Does Bill Miller think financial stocks are beaten down? Maybe investigating more closely will help improve your own results.

On Motley Fool CAPS, our top-rated All-Star players represent the best 20% of more than 110,000 professional and novice investors. I'm looking among them for those who've chosen one- and two-star stocks to outperform the market. Most CAPS investors might consider these stocks losers, but if our ace contrarians think otherwise, these picks might be worth a look.

Here are a few stocks that have gotten the nod from the cream of our CAPS investors:


CAPS Rating
(out of 5)

Est. Long-Term
EPS Growth


Player Rating






Circuit City (NYSE:CC)





Tri-Valley (AMEX:TIV)





Pyramid Oil (AMEX:PDO)





Winnebago (NYSE:WGO)





Source: Motley Fool CAPS ratings as of June 23; Yahoo! Finance.

A sound opportunity
DTS is one half of the typical technology duo incorporated into just about all our sound experiences, and it sounds as though it's been enjoying profits from current operations. To audiophiles, DTS, with its six discrete channels of sound, is the premier technology over rival Dolby Labs (NYSE:DLB), which uses five channels.

An average listener hears little difference between the two, and Dolby is better known. But DTS has been getting an edge up in Blu-ray movies; DVDs released in the next-generation format seem to have a number of movie studios, like Universal, using them as the standard.

That isn't enough to convince some investors that DTS will continue to advance. CAPS All-Star falcon2382 found management's caution on the last earnings call to be a warning  -- for the immediate future anyway:

Enough of the metaphors, already ... I hear yah. Try this on for size: During the conference call yesterday (may 13th) which saw the stock jump because of better than expected earnings, the CEO gave a fairly strict warning that next quarter won't match up. I say to myself: "Wait a minute, I thought the end of 2008 was when we were supposed to crawl out of this mess---why the warnings all of a sudden?"

Boom time
Elevated energy prices have pushed many oil and gas companies to higher levels, but Tri-Valley hasn't been one to cash in. In fact, until it cemented a deal with ConocoPhillips (NYSE:COP) the other day to refine some 2,000 barrels a day from its Pleasant Valley wells, its shares were actually 30% lower than they were a year ago.

Tri-Valley has been stuck, as it were, because its Pleasant Valley reserves are tar sands, bituminous sand that has extra-heavy oil trapped inside. Its extreme viscosity makes this an expensive form of oil to extract and use. At low price levels, it's not advantageous to try, but with the price of oil sitting well north of $100 a barrel, oil sands make more economic sense.

The new deal has investors like EPS100Momentum holding out hope for outperformance, while junueaujoe is buying into the oil and gas hype and foreseeing explosive growth:

Oil and gas hype ... recent better than expected results after years of disappointment. Proven reserves that could take it into the $50 range in years to come.

Motoring nowhere
Gasoline at $4 a gallon is simply not the right environment for the amount of fuel a Winnebago sucks down. It's tough to find a positive short-term outlook for the RV maker, although for investors with a much longer investment horizon, even the naysayers feel it has potential.

With high fuel prices, a weak economy, and a bunker mentality among consumers, CAPS investors like schuured have a hard time mustering any enthusiasm for Winnebago:

Although some would argue that Winnebago is a great value opportunity right now (and, long-term, I may concur) I can't see anything other than hard times ahead for [Winnebago]. Rising gas prices, diminished discretionary spending and a general bearish trend in the markets will likely keep many would-be customers away from RV manufacturers. Even baby-boomers (who are likely a significant portion of [Winnebago] business) are likely to guard their money closely as their nest egg shrinks along with the S&P 500.

Finding value under rocks
So there you have it -- five low-rated laggards that have gotten big endorsements from some of the best and brightest investors in the CAPS community, although there are always some who are not so sure. If you want to add your two cents on these or any other companies, sign up to join Motley Fool CAPS, absolutely free.