You don't need the investing acumen of Warren Buffett or the riches of a trust fund baby to achieve financial success.

Since the stock market is your best hope for realizing your dreams, start investing today, by putting away small sums of money every month. Then seek out undervalued small-cap stocks for your greatest returns. I like these stocks because they offer opportunities for growth, while still being mostly overlooked by the big investors.

To find these future giants, we'll screen for stocks with market values less than $3 billion, an earnings surprise of 15% or more in the previous quarter, and forecasts for long-term earnings growth potential of at least 15%. We'll filter our findings through the collective investing wisdom of the 165,000 members in our Motley Fool CAPS community. If the best and brightest CAPS players think these stocks hold potential, we ought to take notice, too.

Here are some of the stocks this simple screen found:


Market Cap

EPS Surprise

Avg. Analyst
5-Year EPS Est.

CAPS Rating
(out of 5)

Elan (NYSE: ELN)

$2.6 billion

$0.00 vs. ($0.04)




$756 million

$0.06 vs. $0.01



ReneSola (NYSE: SOL)

$510 million

$0.14 vs. $0.09



Source: Yahoo! Finance and Motley Fool CAPS.

Of course, this is not a list of stocks to buy -- just a starting point for more research. We need to look more closely at these companies to see whether analysts' faith in them is well-founded. Still, since the CAPS community's helping us out, their favorite selections might be a good place to begin.

An alternative opportunity
It's not just multiple scelrosis patients running the risk of infection from Tysabri; both Elan and its partner Biogen Idec (Nasdaq: BIIB) have seen their respective stocks catch the bug too. Elan's stock has been nearly cut in half since early April while Biogen's shares trade 14% lower (they were down 20% at one point).

Elan had enjoyed a 28% jump in Tysabri sales last quarter, but the partners reported six new cases of progressive multifocal leukoencephalopathy, the potentially fatal brain disease that's been found in some patients taking the drug. That couldn't have come at a worse time for the drug makers, as Novartis should be bringing a competing therapy, Gilenia, to market soon. The orally taken medicine could be a keen rival to the problem-plagued Tysabri.

Earlier this year, CAPS member watchit2 suggested Tysabri sales would ultimately falter, particularly as new cases of PML that were surfacing then would impact results.

Head over to the Elan CAPS page and let us know if you think the twin threats of new PML cases and Novartis' new drug will cause Elan's stock to sicken further, or will it turnaround with a possible divesture.

Taken for a ride
You'd think with world economies apparently crumbling again, solar stocks would fall the hardest. After all, Spain, Germany, and Italy are all cutting solar subsidies, and oil prices, while elevated, have been held in check by economic recovery concerns.

While the CAPS Solar Power sector is down 4% over the past month compared to just a 1.4% decline in the broader indexes, First Solar (Nasdaq: FSLR) is up 6% and Trina Solar (NYSE: TSL) has inched up 4%. Of course, that means there were some pretty sharp drops, too, like Evergreen Solar (Nasdaq: ESLR) declining 18% and a 17% drop by Canadian Solar.

LDK Solar is about the middle of the pack, down 5.3% despite having posted better profit margins on a 23% increase in sales. Investors remain upbeat about the stock, with 94% of the more than 1,400 CAPS members rating the solar shop to outperform the market.

ReneSola, on the other hand, has fallen in line with the Solar Power sector, and investors remain even more ebullient about its prospects with 97% of CAPS members giving it the nod to beat the broader indexes. CAPS member Cascais17 sees a mix of reasons why it should do so.

[ReneSola] will get back on a 'rocket ride' as long as the stock price stays over $5.00, because at that level the institutional traders (hedge funds, etc.) can get onboard. They were burned last year, but this is a new year with loads of opportunity. Don't eat rocket smoke by missing this ride!

Let us know on the ReneSola CAPS page if you agree with Cascais17's sunny disposition.

Foolish final thoughts
Stock investing is not rocket science. Finding good, undervalued companies is not as difficult as the professionals want you to think. You just have to commit to starting now, and do so regularly. Now's the time to begin!

Elan and First Solar are Motley Fool Rule Breakers selections. Novartis is a Global Gains 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 here. The Motley Fool has a disclosure policy.