These 5 Underdogs Are No Dogs

Short-sellers and hedge funds may be shadowy, but sometimes they are the smartest ones in the room. They've done their homework, and they're willing to bet their capital against the crowd -- an investing strategy that can be as lucrative as it is contrarian.

On Motley Fool CAPS, we also have members who find the chinks in a company's armor and correctly call its fall. Our "Underdogs" have earned 100 or more CAPS points by 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. Instead of studying more of their pessimistic picks, we'll focus on the stocks these top members expect will outperform the market. If these CAPS investors have scored big by correctly predicting which stocks will fail, it may be worth our while to see which others they think will succeed.

Not every short sale goes as planned, making shorting a risky proposition. 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 -- just the launching pad for further research.

Underdogs still wag their tails
There's a difference between gold and silver that has some investors expecting silver to rise even if gold falls. While gold is prized as an inflation hedge -- and the government's spending spree would seem to make that a good bet -- as CAPS member dshih714 points out, there are many industrial uses for silver that make it valuable beyond its hedging capabilities:

The dollar is going to be devalued.
Silver is a limited resource.
The gold/silver ratio is at historic highs.
And unlike gold it is consumed.

While Silver Wheaton (NYSE:SLW) can claim to be one of the lowest-cost silver producers, Coeur d'Alene Mines is not only a silver mining company, it also doubles as a gold miner, thanks to its sizable reserves. Coeur d'Alene Mines is ramping up production at the world's largest pure silver mine, San Bartolome in Bolivia, and its newest operations in the silver and gold mines of Palmarejo. This combined production makes Coeur d'Alene the shiniest catch of them all.

There's a reason why 95% of the more than 1,300 CAPS members rating the miner believe it will outperform the market. Look at Coeur d'Alene Mines' CAPS page and let us know if you think the company is more precious than silver or gold.

Through the looking glass
The recession may be taking its toll on a number of sectors, but the LCD TV market is one that's showing some surprising resilience. Sales for glass panel maker Corning in October increased 45% over last year, with sales to China leading the way with 115% growth. But the U.S. was no slouch either, increasing by 28%, while sales to Europe were up 20% from a year ago. No wonder Corning expects demand to remain strong for the rest of the quarter.

CAPS member golfooler says consumers will help Corning outperform the market:

Corning will trend higher as consumers get back out and shop. As the second Holiday season of this recession takes place things are looking brighter and the stored demand will give GLW a nice boost.

Black Friday sales, for which market analysts really look at the entire week, showed consumers spent about $2.7 billion on consumer electronics. With retailers like Best Buy (NYSE:BBY) reporting same-store sales almost 5% higher for the latest quarter and up more than 8% in November alone, look for full-year TV sales to surpass expectations.

There's no need to fear ...
Underdogs often shine brightest with their backs against the wall. Still, it takes more than a few All-Star picks and a quick paragraph to make buy or sell decisions. 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.