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 casino underperform calls
So, with that methodology as prelude, I present to you the seven one and two-star casino stocks with the most CAPS community member underperform ratings (I used a minimum market capitalization of $100 million). 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

Wynn Resorts (Nasdaq: WYNN)






Las Vegas Sands (NYSE: LVS)






MGM Resorts (NYSE: MGM)






Isle of Capri Casinos (Nasdaq: ISLE)






Boyd Gaming (NYSE: BYD)






Pinnacle Entertainment (NYSE: PNK)






Ameristar Casinos






Source: Motley Fool CAPS. NM = not meaningful. Data as of Aug. 25 close. Price change from Aug. 28, 2009.

When I tabulated the casino stocks with the most outperform picks, we saw that Melco Crown Entertainment (Nasdaq: MPEL) was the only big vote-getter with a consensus outperform rating (four stars). Our CAPS community is down on the casino industry as a whole.

Wynn is the casino stock rated underperform by the most CAPS members. Do you think this lack of love is deserved? Make your thoughts known in CAPS by clicking here. Or just click through to do further research on one of these stocks.

If you'd like some more reading, check out The Market-Beating Secret Buffett and Lynch Won't Tell You.

Anand Chokkavelu owns shares of Melco Crown Entertainment. Ameristar Casinos is a Motley Fool Hidden Gems pick. Melco Crown is a Global Gains recommendation. The Fool has a disclosure policy.