Short-sellers and hedge funds, though sometimes shadowy, are often considered 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've got our own brand of investors 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 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

Member Rating

Company

CAPS Rating (out of 5 max)

Call

goldminingXpert

100.00

Qwest Communications (NYSE:Q)

***

Underperform

nicvo

99.99

Ener1 (NASDAQ:HEV)

*

Underperform

chk999

99.99

TD AMERITRADE (NASDAQ:AMTD)

****

Outperform

Gtrinvestor

99.98

Barrett Business Services (NASDAQ:BBSI)

*****

Outperform

fransgeraedts

99.98

ConocoPhillips (NYSE:COP)

*****

Outperform

Not every short sale goes as planned, so it's a risky position. 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
It sounds like Venezuelan strongman Hugo Chavez is singing a siren song to the oil companies. Only two years ago, he chased ConocoPhillips and ExxonMobil (NYSE:XOM) out of the country and seized their assets. Now, he's making overtures to lure Big Oil back. Nineteen oil companies have forked over $2 million apiece to check out the technical specifications of new projects.

CAPS member Greener1977 looks at the financial stability of ConocoPhillips in a recent pitch:

[ConocoPhillips'] P/E ratio is a 4 versus industry ratio of 6...It's dividend payout ratio is 15 (28% industry ratio) which means 15% of earnings is paid to shareholders via dividends...that means the Company has 85% of its earnings to finance the daily operations whether it be debt repymts; share buybacks, etc..It also means that [ConocoPhillips] is paying out less of its earnings than its competitors at current payout rates. LTD: equity is slightly higher than industry; however it is still manageable without diluting the existing share value in issuing additional shares...Current ratio is 1 which is comparable to industry standards and is indication that [ConocoPhillips'] financial strength and it illustrates the company's ability to meet its current obligations with existing assets...receivables and inventory turnover significantly better than the industry which means money is coming into the door at a faster rate than competitors.

An enriching investment
Sure, with stock prices down, there are a lot of tempting acquisition targets out there. Yet it's always interesting that it takes just one industry member to make a move before others seem willing to step up. For example, when TD AMERITRADE took the plunge and announced it was going to buy thinkorswim, it took all of three seconds for optionsXpress (NASDAQ:OXPS) to say that it, too, would be in the market to make a purchase.

Yet CAPS All-Star LookMomBoogers -- interesting name, by the way -- isn't exactly enamored of the thinkorswim purchase, but feels the stock will get a short-term boost from the announcement:

I don't love the deal with [thinkorswim] but, as [thinkorswim] owners get .4 a share, I think the [TD AMERITRADE] share price gets driven up for the next few weeks.

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. 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. 

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optionsXpress and Barrett Business Services are Motley Fool Hidden Gems Pay Dirt picks. optionsXpress is also a Stock Advisor recommendation.

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.