The occasional shower of pennies from heaven might do our bank accounts some good, but we Fools can't say the same for penny stocks. The world of penny stocks is often full of manipulation and deceit, making it harder for investors to separate its few good offerings from the multitude best ignored.

Still, many investors dabble at the low end of the stock-price spectrum. At Motley Fool CAPS, we award the "Pennies" title to investors who rate stocks trading in the single digits more than half the time. Believe it or not, you'll find some of the best CAPS All-Stars among those players.

Pinching pennies
This week, we'll look at some of the low-priced investments these All-Stars have praised. If the best investors regularly scanning this end of the market have singled out these companies, we might want to turn our umbrellas upside-down -- or run for cover!

Here's the latest list of low-priced stocks with All-Star support:

Company

Price*

CAPS Rating (out of 5)

Player

Player Rating

Crocs (NASDAQ:CROX)

$4.86

**

vanamonde

99.97

Western Refining (NYSE:WNR)

$8.51

***

goldminingXpert

99.90

Martha Stewart Living Omnimedia (NYSE:MSO)

$7.70

*

Tankota

99.62

Edge Petroleum (NASDAQ:EPEX)

$5.30

***

Rox6525

99.50

Evergreen Solar (NASDAQ:ESLR)

$9.05

***

Zippidy1

99.27

*Price when the outperform call was made.

A kick in the pants
Is management at Crocs to be believed anymore after a disastrous quarter in which its guidance, not to mention analysts' expectations, turned out to have more holes than its shoes? CAPS member recked suspects that at these distressed valuations, Crocs is more of a takeover target than anything, but with sales plummeting and inventories rising, would anyone want to take it on? As recked put it:

How low can it go? At $4 and change, it's in M&A territory. Beyond the commonly stated opinion that it is simply a fad, consider that the recognition of the product on sight, and the knock-offs copying the appearance (but unable to copy the actual design, since it cannot copy the resin material used in the product) show that it is, [in] fact, a recognized brand. Is the proprietary resin *that* special? I don't know, but people who wear the "real thing" swear that there is functional difference in the footbed of the shoe. Is it the kind of innovation like the "waffle" tread design that launched Nike? That remains to be determined.

No slick trick
When ExxonMobil (NYSE:XOM) reports profits that amount to about $4 billion a month (even if it missed expectations), you might expect everyone in the business is doing well. Not so. Refiners like Western Refining, Tesoro (NYSE:TSO), and Valero are saddled with compressed margins, thanks to decreasing crack spreads.

Just today, CAPS member jdlech predicted that Western Refining will test new lows as crack spreads narrow -- but that might set up conditions for a rebound:

[Western Refining] reported a loss last quarter and crack spreads have narrowed since. I expect an even bigger loss this quarter while analysts are predicting smaller losses. I think [Western] is set up to hit a new yearly low.

And then comes the short squeeze.

Place an ad for growth
Martha Stewart Living Omnimedia's quarter looked good on the surface, but the cracks in the foundation seem to warn of much larger troubles. Despite the company reporting a profit of $0.01 per share, compared with a $0.13 loss last year, deals with Kmart are winding down, ad revenue is off, and -- with the economy still mired in the muck -- advertisers are still uncertain where their dollars will be spent, if at all.

CAPS member johnwick finds the dying Kmart deal a particularly harsh blow, because it made up one-fifth of revenue last year:

For every year between 2003 and 2007, Kmart didn't sell enough Martha Stewart Everyday products to meet the minimum royalty promised to [Martha Stewart Living]. And so those payments are about to plummet: Unless Kmart has the turnaround year of the century and Martha's products fly off the shelf, it won't be required to pay MSLO more than $20 million in 2009. That's $45 million less than this year, a drop that will all but eviscerate profits in the company's merchandising division.

Make some change
What do you think? Should we fill up the change jar with these penny stocks, or ignore 'em like a discarded coin on the street? Consult our free Motley Fool CAPS investor-intelligence community, where your two cents count as much as anyone else's.

Crocs is a Motley Fool Hidden Gems Pay Dirt recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Fool's disclosure policy always wins the coin toss.