Short-sellers and hedge funds, although sometimes shadowy, are often seen as the smartest guys in the room. They did their homework and 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 have 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 that one or more stocks would underperform the market.
Let's look at some of the recent calls these All-Star investors have made. Yet 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 |
Company |
Call |
||
|---|---|---|---|---|
|
100.00 |
Evergreen Solar |
*** |
Underperform |
|
|
99.99 |
Garmin |
**** |
Outperform |
|
|
99.99 |
Yamana Gold |
***** |
Outperform |
|
|
99.98 |
United States Oil |
** |
Outperform |
|
|
99.98 |
Microsoft |
*** |
Outperform |
Not every short sale goes as planned, so it's a risky position to hold. Stock prices can be irrational 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
Now that former glamour girl Yahoo!
Looks like a search deal with Yahoo! is now inevitable as Microsoft has ruled out a complete takeover, but it is in the best interests of both to unite against Google for web search. Now that Yahoo's ad deal with Google has been scrapped, look for near-term deal with Microsoft for web search. Should be worth about 8 bucks a share to Yahoo! and take the stock back to around 20 bucks on announcement of deal with Microsoft for web search.
Meanwhile, in the world of precious metals, CAPS member karnivore finds Yamana Gold cheaply valued at its current levels, particularly since its cost to produce gold is well below the price of the commodity, even with gold well below its recent highs:
even if gold halves in price, i feel like we're still good here. it's costing them less than $200 /ounce to pull it out of the ground. they've got more than enough to justify the current price even based just on existing projects.
And then there's the solar realm. Despite having "fundamentals which continue to appear solid,” Evergreen Solar continues to see its shares trade at extreme discounts from recent highs. Yet it's the company's "string ribbon" technology, as opposed to more typical polysilicon modules produced by First Solar
What I like about [Evergreen Solar] is that they are a crystalline silicon manufacturer, but they have a unique technology called "String Ribbon" that helps reduce the consumption of silicon in their process. Long-term I think this could be a big advantage of their competitors. Moreover, my own research of the company makes me feel more comfortable that this isn't some fly-by-night operation. I think they are very committed to the quality of their products; more so than companies like [First Solar] and most of the Chinese manufacturers.
You can read the full, detailed analysis at Evergreen Solar's CAPS page.
There's no need to fear ...
When underdogs have their backs against the wall, that's when they can shine their brightest, but it takes more than a few All-Star picks and a quick paragraph to make buy or sell decisions. So start your own research on these stocks on Motley Fool CAPS, where your opinion can still save the day. While you're 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 there than you might think.
