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 investors 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. However, we're going to 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.


Member Rating


CAPS Rating
(out of 5)



Corning (NYSE: GLW)




Harley-Davidson (NYSE: HOG)




Sirius XM Radio (Nasdaq: SIRI)


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
The market is missing the crystal clear opportunity Corning represents. Analysts continue to worry about the LCD market's "food chain," perhaps focusing on how the U.S. market for big-screen TVs is saturated, but it is ignoring the growth ladder being put up in China.

The country accounted for 12% of Corning's total sales in 2009 and 20% of all Asia-Pacific revenues. China is getting ready to shut off its analog TV signals by 2015, exciting the base of China Digital TV (NYSE: STV) investors. This also presents a huge, largely untapped void to be filled by digital TVs, primarily LCD ones, as happened here in the U.S. when we were forced to give up the rabbit ears.

China just surpassed Japan as the world's second-biggest economy. Corning is expecting China to become the world's biggest consumer of LCD TVs very soon, and the glass for LCD TVs brings in two-thirds of Corning's revenues. It's easy to see how the two forces coming together make this an explosive opportunity. Corning does, and it's building a new substrate factory in the country next month to handle the anticipated demand.

Add in its newest hit, Gorilla glass, which is used in the Apple iPhone and iPad, and there's a tremendous area for padding revenues here. In fact, CAPS member JoeP expects this to be the real key: "If Gorilla glass is found acceptable by the consumer electronics producers, watch out!"

A dose of reality
When Harley-Davidson bought Italian sport bike maker MV Agusta in 2008, I likened it to one of the signs of the apocalypse for the iconic name, almost as bad as when AMC took over Harley-Davidson and ruined the company's reputation. (The standing joke was that you needed to buy two Harleys -- one to ride and one for parts).

Well, Harley's trying to retrace its steps now, selling Agusta back to its previous owner while also unloading its Buell division. While a hog will always be a classic motorcycle, it seems a long time ago, a used Harley could sell for the same price as a new one because of outsized demand. Of course, it wasn't a lonely ride down. Honda Motors' (NYSE: HMC) motorcycle business was down 19% in fiscal 2010 and is almost 27% below its peak 2008 sales.

Camero4eva writes that Harley-Davidson's newest models appeal to a younger crowd, which will lead to the stock roaring ahead.

Probably making more money off of Accessories and T Shirts at this point, and I see the showrooms packed with buyers every weekend, sure the big ticket bikes may not be flying out the door in this econ, but they are creating new styles (IE the liquid cooled VROD, and [stripped] down [tough] nightsters) to appeal to the younger crowd. Like they say if I Have to explain, you probably wouldnt understand.

Market disconnect
Sirius XM Radio seems to be a perennial underdog candidate, despite improving financials and operations. It reported rising revenue and profits, a growing subscriber base, and an improving picture for auto sales, while satellite TV-provider DISH Network (Nasdaq: DISH) slipped in subscriber growth. Yet there's still a lot of doubt about the company, particularly if Howard Stern bolts and it loses all those subscribers who signed on simply to hear the shock jock.

CAPS member Arjunmarkanda says that before you give up on where Sirius can go, remember where the satellite radio company was.

XM and Sirius merger was supposed to rocket this stock but the recession killed the company. It will bounce back over time. Dont forget it was selling for 5cents a share in 2009.

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.

China Digital TV is a Motley Fool Rule Breakers recommendation. Apple is a Stock Advisor selection. Try any of our Foolish newsletter services today, free for 30 days.

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 stress-free disclosure policy.