Stocks That Swayed the Skeptics

It pays to be skeptical when you invest. In addition to doubting what the analysts tell you, you often have to discount what the companies tell you, too. On Wall Street, going against the grain can reap huge rewards. Investors such as Buffett, Graham, and Neff abhor the "wisdom of crowds."

Today's new breed of contrarian investor can be found at Motley Fool CAPS, where these savvy Fools are willing to see both the upside and downside of a stock. While their often negative opinions peg them as "skeptics," their top CAPS ratings mean they're right far more often than not. And when they find a stock they actually believe will outperform, perhaps we should take notice.

Here are some recent picks from our list of Foolish CAPS skeptics:

Just as a list of their worst stocks would not be a list of stocks to short, this list of the skeptics' favorites isn't automatic buys. But they do offer an excellent starting place for your own research of extreme buying opportunities.

Inquiring minds want to know
Nuclear energy is going to remain a key component of this country's future energy needs. For all the faith as President Obama has put in "green" battery technology lately -- he's made appearances at four battery manufacturers since becoming president -- nuclear energy is getting its share of support, too. USEC (NYSE: USU) finally secured $45 million for its centrifuge, and Southern (NYSE: SO) will benefit from $8 billion in government loan guarantees to build the country's first nuclear power plant in almost three decades.

Yet with nuclear power comes the problem of what to do with the waste. Step in EnergySolutions, which handles a large portion of the nuclear waste from power plants in the U.S., through long-term contracts with customer utilities like Excelon (NYSE: EXC) and Duke Energy (NYSE: DUK). EnergySolutions also has an international component, handling waste disposal for foreign entities, too.

CAPS member jc09058 thinks the new initiatives to build nuclear plants are a growth driver for the company, providing a stable source of cash flow.

A company that hold 80% "life-of-the-plant" contracts for nuclear waste disposal will have a stable cash flow for the foreseeable future. The likelihood for additional nuke plants in the future should occur and end of life disposal for existing plants gives this company some long-term potential for revenue growth.

The risk investors need to keep an eye on is the rise of the NIMBY attitude -- Not In My Backyard. EnergySolutions had proposed dumping nuclear waste from one of its Italian clients in its Utah facility, causing an uproar that forced it to cancel the plan. There's growth here for sure, but it's not going to be without its challenges.

No sinking feeling
Obama also used his latest trip to a battery manufacturer to tout his stimulus program. The president noted that this month will see six times as many highway projects as there were a year ago, and that heavy construction is starting to rebound. Spending in the space in May increased 10% from February, and is up 1.1% from the month before.

After hitting $16 a share in April, crane maker Manitowoc has seen shares slide as revenues from that segment of its business deteriorated. (Its foodservice business, which accounts for 43% of revenues, is enjoying rising sales.) The stock is 38% lower than where it was three months ago, but that suggests a buying opportunity, according to CAPS member bmoser81: 

it's gotten beaten down to nothing. all the bridges in the u.s. that need fixing, all the building requiring cranes in our infrastructure rebuild, just give it time, this is a much needed company.

Is it morning in America?
It's hard to escape the conclusion that the sun is setting on Sunrise Senior Living. The assisted living facilities operator has run aground amid financial difficulties, and has resorted to selling off its assets, including to rival Brookdale Senior Living. Just recently, it offloaded most of its properties in Germany in an attempt to raise cash, defaulting on much of its debt, including that held by the lenders of the German retirement communities.

Despite the challenges, 87% of the CAPS members rating Sunrise indicate it will outperform the broad market averages, though its two-star rating suggests they think there are better opportunities out there for your investing dollar.

Seeing past the obvious
Skeptics know that just beyond the storm clouds lies a shimmering morning. Conversely, the sun can't shine forever, whatever the crowds may think. It pays to start your own research on these stocks on Motley Fool CAPS, so stop by and tell us which stocks are your own favorite contrarian picks.