Short-sellers and hedge funds, though sometimes shadowy, are often seen as the smartest guys in the room. Having done their homework, they will bet their capital against the crowd. It's not the most popular way to go, but the rewards can be quite lucrative.

On Motley Fool CAPS, we've got our own brand of leading analysts who found the chinks in a company's armor and correctly called its fall. "Underdogs" are investors who earned 100 or more CAPS points correctly predicting a stock would underperform the market.

Let's look at some of the recent calls these All-Star investors have made. And just as hedge fund operators don't always go short, we're going to look at recent Underdog picks no matter which way they've called them.

Underdog

Member Rating

Company

CAPS Rating (out of 5)

Call

TheGreatSatan

99.99

Great Atlantic & Pacific Tea Company (NYSE:GAP)

*

Underperform

TDRH

99.99

BP (NYSE:BP)

****

Outperform

gtrinvestor

99.99

Cree (NASDAQ:CREE)

****

Outperform

BullMarketN09

99.98

Yahoo! (NASDAQ:YHOO)

**

Outperform

turbotrager

99.98

Anadigics (NASDAQ:ANAD)

****

Outperform

Source: Motley Fool CAPS.

Not every short sale goes as planned, so it's a risky position to hold. Stock prices can be irrational for longer than you have money to stay in the game. So don't use this as a list of stocks to sell or buy, but rather as the launching pad for further research.

Underdogs still wag their tails
The blow the failed Microsoft (NASDAQ:MSFT) deal dealt to Yahoo! investors is still being felt today, as confidence in the Web portal's ability to get a deal -- any deal -- done remains low. The ad-outsourcing deal with Google (NASDAQ:GOOG) has done little in the way of supporting the stock, even though it could bring as much as $450 million in incremental revenue to the portal. Some CAPS members think perhaps too much emphasis is being placed on a Google rescue. NightBengal sees plenty of other options that could drive value:

The company has stagnated lately and has paid the price for it. I do not think this trend is going to continue. If they get bought, they go higher. If they come up with innovative content, they go higher. By allowing third-party content on their sites, they are opening the doors for new revenue streams and heightened advertising income.

The only way I see Yahoo! going lower long-term is if the company does not come up with a single new idea and continues to languish and milk the business. I do not see the board or the shareholders allowing this to happen. If the Google deal falls through, this could also be a short-term hit, but it is by far not Yahoo!'s only option.

It was a nasty shock when chip maker Anadigics readjusted its guidance only a few weeks after its earnings conference call. Weakness in the sector has management suggesting things will remain difficult for longer than it had anticipated, and while that has caused an equally ugly decline in its share price, CAPS member tulipomania found late last month that it represents some excellent long-term opportunity:

Share price is down severely over the past year to the point where it looks downright cheap. They have more cash than debt and have been growing revenue and profits steadily over the years. PEG, PE, PB are all less than 1. Maybe the recent management shakeup will do something for the stock. . .

Furthermore, consumers will gradually begin demanding 3G from their phones and better laptop connectivity, jump started by the convenience demonstrated by the iPhone (and eventually others). Consumer demand may not spike right away, especially if times are tough, but eventually it will happen. [Anadigics] is small and has a lot of room to grow.

Cree, with its market-leading position in LED solid-state lighting, has marketplace advantages thanks to its use of silicon carbide and gallium nitride for chips that produce more power in a smaller package while producing less heat. CAPS member Anvil13 sees that as a key to moving earnings up in the months ahead:

I believe gallium nitride is going to play a significant role during Crees part of the tech recovery. Earnings should be moving up over the next thee quarters.

There's no need to fear ...
When underdogs have their backs against the wall, that's when they can shine their brightest. It pays to start your research on these stocks on Motley Fool CAPS, where your opinion can still save the day. While there, you can 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. There's more than you think.

Microsoft is an Inside Value pick. Google is a Rule Breakers 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 Motley Fool has a disclosure policy.