It pays to be skeptical when you invest. In addition to doubting what the analysts tell you, you often have to discount what the companies tell you, too. On Wall Street, going against the grain can reap huge rewards. Like baseball's greatest place hitter, "Wee Willie" Keeler, great contrarian investors such as Benjamin Graham, Warren Buffett, and John Neff "hit 'em where they ain't."

Today's new breed of contrarian investor can be found at Motley Fool CAPS where these savvy Fools are willing to see both the upside and downside of a stock. While their often negative opinions peg them as "skeptics," their top CAPS ratings mean they're right far more often than not. And when they find a stock they actually believe will outperform, perhaps we should take notice.

Here are some recent picks from our list of Foolish CAPS skeptics:


CAPS Rating (out of 5 max)


Member Rating

Bank of America (NYSE:BAC)




ConocoPhillips (NYSE:COP)




China Fire & Security Group (NASDAQ:CFSG)




Pacific Sunwear (NASDAQ:PSUN)




Dolby (NYSE:DLB)




Just as a list of their worst stocks would not be a list of stocks to short, this list of the skeptics' favorites isn't automatic buys. But they do offer an excellent starting place for your own research of extreme buying opportunities.

Inquiring minds want to know
With ConocoPhillips in the "deep value bin," CAPS member FGunawan finds comfort and confidence in the fact that Berkshire Hathaway has been buying shares. It also helps that Conoco made a successful $4.8 billion bid for a 50% stake in a joint venture with Origin Energy.

Conoco Phillips has dipped into a deep value bin. Even with oil prices off their highest levels, they are still up over previous year levels, yet this stock is hovering around a 52-year low. With P/E in the middle single digit this is an investment that will pay over time. It should also come as a confidence booster that Warren Buffett's Berkshire Hathaway purchased a sizable amount of shares in the second quarter.

The Countrywide Financial acquisition has a lot of investors grousing about what it will do for -- or is it "to"? -- Bank of America in the immediate future. CAPS member TekATL08 finds other issues just as alarming, such as the continuing reset of interest rate mortgages that will cause a further writedown of earnings.

Although using some creative financing to dump subprime exposure, now seeing more prime loans being dumped. Also, the 3 year arms will start resetting 3Q '08, which means at least another year of write downs. We simply saw the 2 year ARMS reset, which was huge write-down, they are not out of this storm just yet. I am saying another 6 months, before they start seeing a turn around and write downs start diminishing and all that bad news is already priced in. Also, the purchase of Countrywide was further exposure into the subprime debacle. What the mortgage brokers used to say...if you can't repackage a loan to any lender, repackage the loans to either Countrywide or GMAC, because they will always take it.

Almost implicit in CAPS member InternetSecurity's outperform rating of Dolby Labs is the fact that to many audiophiles the technology rival DTS (NASDAQ:DTSI) offers is often seen as superior. Yet the ubiquity of Dolby's own sound technology ensures that it will continue to be the industry leader.

How Dolby has held onto its intellectual property and licensing even beyond the 17 years a patent would last is a mystery to me. I think it is a brand that is barely noticed by the mass consumer market even though the logo is on much of what they own. I suspect Dolby's licensing agreements of being deeply ingrained in systems and that somebody is making sure they stay that way. That will be the reason for their continued existence and success-not technological superiority or the inability of anyone to copy their technology. They must have some Heavies :)

Top-rated CAPS All-Star TMFBent thinks teen retailer Pacific Sunwear has its turnaround story in place, and though things may be volatile, a multi-bagger is in the works. While many retailers have had a rough go of it lately, some like Aeropostale (NYSE:ARO) have been able to capitalize on their value message with consumers, something PacSun has yet to figure out.

Doing horribly now, but not likely to have a liquidity event and management seems to know how to right the ship. Who knows how low things will go, but I expect a couple of bags minimum over the next 5 years. High risk, however.

Seeing past the obvious
Skeptics know that just beyond the storm clouds lies a shimmering morning. Conversely, the sun can't shine forever, whatever the crowds may think. It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made all from a stock's CAPS page. What's your forecast? Drop by CAPS and tell us which stocks are your favorite contrarian picks.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.