As an investor, it doesn't pay to follow the crowd.

In this series, though, we highlight a possible exception -- the collective wisdom of our CAPS community. Read the next section if you're unfamiliar with our methodology. Skip it if you want to go straight to the results.

Why this crowd is different
Jumping into a stock because your rich neighbor did, or because you heard about it from your friend's uncle who used to work on Wall Street, or because CNBC has been talking about it nonstop is a recipe for disaster.

If there's one thing I've learned as a stock analyst, it's that any stock can be gussied up to sound like a world-beater. If there's a second thing I've learned, it's that being a smart person doesn't make you a good investor.

In the hands of a smart person with good communication skills, the never-were and never-will-be stocks sound like tickets to instant fortune. The ancient Greek philosophers made the distinction between rhetoric and knowledge. The former is convincing; the latter is true.

That's why we factor in track record in our Motley Fool CAPS community. We invite everyone to give stocks an outperform (akin to a "buy" call) or underperform rating (akin to a "sell" call) in CAPS. We then use those opinions to calculate a rating for each stock -- from one to five stars (five being the best). But -- and this is a big distinction -- we give more weight to the opinions of folks whose picks have performed well in the past.

The top 7 real estate underperform calls
With that methodology as prelude, I present to you the seven one- and two-star real estate stocks with the most CAPS community member underperform ratings (I used a minimum market capitalization of $100 million and the proviso that must be listed on a major U.S. exchange). Remember, stocks are rated on a five-star scale by our CAPS community, so one- and two-star stocks are consensus underperforms.

Company Name

 Market Capitalization (in millions)

52-Week Price Change %

Price to Earnings (TTM)

CAPS Rating (out of 5)

Underperform Picks

Simon Property Group (NYSE: SPG)






Vornado Realty LP (NYSE: VNO)






St. Joe (NYSE: JOE)






Developers Diversified Realty (NYSE: DDR)






The Macerich Co. (NYSE: MAC)






Apartment Investment & Management Co. (NYSE: AIV)






Boston Properties (NYSE: BXP)






Source: Motley Fool CAPS. N/M = not meaningful.

The past year has seen some nice gains for six of these seven real estate stocks. As they seek recovery in a still tenuous real estate market, earnings are low relative to price or nonexistent. The CAPS community isn't impressed with these seven.

More CAPS members think mall magnate Simon Property Group is an underperform more than any other real estate stock. Do you think it deserves this lack of love? Make your thoughts known in CAPS by clicking here. Or just go there to do further research on one of these stocks.

You can see the flip side -- the top-rated real estate stocks by clicking here.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.