These 5 Underdogs Are No Dogs

Short-sellers and hedge funds may be shadowy, but sometimes they are the smartest guys 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've also got leading analysts 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 that 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 seem to be few companies that subsist on rumors of Apple (NASDAQ:AAPL) business more than OmniVision Technologies. It was recently suggested that its orders for CMOS image sensors would double as the iPhone consumed greater numbers of them in a push for larger sales, and that's getting new life as it's suggested large quantities of 5-megapixel sensors have been secured from OmniVision.

With Google (NASDAQ:GOOG), Palm, and Motorola all offering flash-supported cameras, this new rumor suggests Apple is not ceding any ground to its rivals and will boost the resolution of its 3.2-megapixel iPhone offering. CAPS member tomorbeck finds OmniVision being able to increase its presence across a number of technology platforms:

Expanding markets (notebooks, auto, security, medical, entertainment) plus image sensor market in transition to new formats/features with OVTI in leading the way.Has potential to be huge in next 1-3 years.

The CAPS community would seem to agree, as 94% of the more than 600 members rating the chip specialist believe it will outperform the market. Why not head over to the OmniVision Technologies CAPS page and engage in a little rumormongering of your own?

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With T. Boone Pickens cutting in half the number of wind turbines he wants to order, he's turning his attention once again to natural gas and pushing legislation that would help pay for converting trucks. That could help give the alternative fuel a push, though his interest didn't do as much as was hoped for wind energy.

It's going to take a lot more than a brief rally in natural gas to impress highly rated CAPS All-Star member UltraLong on the long-term prospects of Clean Energy Fuels:

Call me the grinch when it comes to renewable energy but as has become my customary phrase here recently, I'm not impressed. I do think natural gas could become a viable play, but it has already had one hell of a rally the past three months. Even with this rally and the huge jump in revenues expected in 2010, CLNE is trading at over 90 times future earnings expectations. This is far too rich for my blood, especially given consumers unwillingness thus far to move to a natural gas based transportation system, outside of mass transit. CLNE won't turn a profit until mid 2010 at the earliest. Over 8 times sales, 3.61 times book... yeah, not impressed.

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, 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.