Wall Street's Best Hidden Stocks

When asked for the secret of his success, baseball player Wee Willie Keeler replied, "Hit 'em where they ain't." What worked for Willie at the plate applies equally well in investing. 

Seeking stocks that others ignore, shun, or simply forget gives individual investors like you an edge over the professionals. When Wall Street turns a blind eye, you have a chance to get in before these stocks get discovered -- or rediscovered -- and start taking off. 

Below, we'll check out companies with only a handful of analyst coverage, then pair our list with the opinions of the Motley Fool CAPS community. A stock that garners CAPS' top ratings, but hasn't yet caught analysts' attention, could be your next home run investment. 

Source: Yahoo! Finance.

Remember, without analyst support, you'll have to do your own scouting to see whether these stocks deserve a spot on your portfolio's roster. Don't just buy or sell them based solely on their appearance here. 

A utility player
Copper prices sit north of $3.28 per pound; nickel is above $9.60 a pound. Both of those price points indicate that should PolyMet Mining get its permit for its Minnesota open-pit mine, it could be a lucrative proposition.

The NorthMet mine sits on one of the world's largest undeveloped deposits of copper, nickel, and other non-ferrous metals, and PolyMet is sitting in control of all of it. The reserves at the mine were calculated when prices were substantially lower than where they are today. Copper was calculated at a price of $1.25 per pound; nickel, $5.60 a pound; and gold, which is also present, at $400 an ounce. Today its spot price sits just below $1,230.

While that sounds more than just promising, there's a ton of risk here. PolyMet is not Freeport-McMoRan (NYSE: FCX); it's only an exploration-development stage company and hasn't extracted an ounce of any metal. The permitting process is complicated and suffers from a lot of political opposition. Highly rated CAPS All-Star member TMFBent disdains PolyMet's management and thinks it unlikely it gets the requisite approvals, but baseballdude sees a light at the end of the tunnel:

finally the regulatory hurdle with the State of Minnesota and Federal Government as going forward.....All Fools should buy since the copper reserves are the largest non-production deposit on the lower 48 states.......

There's still a long road here, since the Forest Service and EPA are now involved in drafting supplemental environmental impact statements. There's still the final EIS to be completed, and then the responsible agencies have to make a formal decision on whether to approve it. While PolyMet's proposal may actually make it through to the end, investors have plenty of time to decide the merits of including the stock in their portfolio.

All fun and games
Unlike Penn West Energy (NYSE: PWE) or Permian Basin Royalty Trust (Nasdaq: PBT), Provident Energy Trust is no longer tethered to the vagaries of the oil industry, having sold off its upstream business to better focus on becoming a midstream natural-gas-liquids pure play. Its NGL operations are the second largest in Canada, and its new strategic positioning is intended to give investors better growth opportunities. Its latest quarterly distributions resulted in an adjusted payout ratio of 120% that's currently yielding 10.2%.

Dividends can be a lifeboat for investors, and those juicy payouts are what attract investors to trusts like Provident. All-Star avj401 appreciates the help they offer in smoothing out what may be volatile swings in the stock price:

Energy play with dividend , I always like stocks that earn good dividend , in my opinion helps smooth out price swings while holding for short-mid term.

Kicking it higher
If chasing yield is your thing, then checking out real estate investment trusts probably occupies a lot of your time. Resource Capital has a dividend yielding north of 17%, while another REIT, Annaly Capital (NYSE: NLY), has a yield of about 15.5%. Yet chasing yields can be dangerous, and investors need to use caution when evaluating the sustainability of a company's payout.

With Resource investing in commercial real estate debt and other commercial finance assets, it is still trying to weather both tight credit markets and the downturn in CRE. Prices in June dropped the most in a year, with the value of malls and shopping centers falling almost 11% in the second quarter.

bartleyrc sees technical indicators that suggest Resource Capital will underperform the market. But 94% of the 240 CAPS members rating the REIT believe it will go on to outperform the broad averages. Let us know on the Resource Capital CAPS page whether you think this REIT is right for your portfolio.

Swing for the fences
When seeking investments where no one else is looking, Motley Fool CAPS is the best place to start your own research. 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. 

Sign up today for the completely free service, and tell us whether these hidden stock opportunities will help us go one up on Wall Street.