When an overwhelming majority of All-Star stock pickers foresee a company losing to the broader market, it's best to take notice. In our Motley Fool CAPS community, elite members qualify for the All-Star badge by ranking in the top 20% of more than 70,000 rated investors who earn their points by picking whether stocks will beat or lose to the market. A big portion of the All-Stars rating each of the five stocks in the chart below have given a thumbs-down.

Company

Ratio of All-Star "Underperform" Votes

CAPS Rating
(out of 5)

1-Year Total Return,
Dividends Reinvested

Vonage Holdings (NYSE: VG)

85%

*

29.5%

Overstock.com (Nasdaq: OSTK)

83%

*

4.6%

InterOil (NYSE: IOC)

79%

*

77.6%

Pier 1 Imports (NYSE: PIR)

73%

*

127.1%

Lennar (NYSE: LEN)

72%

*

(12.9%)

Source: Motley Fool CAPS, Yahoo! Finance.

Each of these stocks gets a resounding thumbs-down verdict from at least 130 All-Star CAPS members. What's more, they've all held onto their one-star overall ratings for at least two years.

Of course, these ratings don't tell the whole story. There's deeper digging to do before selling, shorting, or making fun of any of these companies. So let's do some of that together.

One wedding
I happen to be partial to Vonage, and have rated the stock "outperform" in CAPS. The voice over Internet protocol (VoIP) phone service provider is on to something with the hyper-affordable Vonage World calling plan, and the company is a master of the cash conversion cycle.

But the bears have solid arguments, too. Fellow Fool and All-Star Dan Caplinger says that Vonage "is all hype and no reality." Other top-rated members worry about strong competition, and some are just happy to see the stock breaking the $1.50 barrier so they can short it in CAPS.

Four funerals
Pier 1, on the other hand, has been on my personal deathwatch list for years. I can only nod in agreement when CAPS All-Star pjani06 calls the stock one of the best shorting opportunities on the market. The stores haven't looked modern or appealing in ages, and there always seems to be a clearance sale going on. The current one-year stock return is a bounce back from penny-stock levels seen a year ago.

I used to own a piece of Overstock, back when it was an official Motley Fool Rule Breakers recommendation. But CEO Patrick Byrne lost my trust, my confidence, and my investment when he started tilting at naked-shorting windmills instead of running his business. Amazon.com (Nasdaq: AMZN) is wiping the floor with this e-tail wannabe, and if you want to invest in closeout retailers, Tuesday Morning (Nasdaq: TUES) would seem like a stronger bet.

InterOil has been on a rocket ride of seldom-seen magnitude. But the price-to-earnings valuation has gotten ahead of the actual growth, and the stock has already given back 32% of the 52-week highs seen in January. On top of that, CAPS superstar TMFDeej explains that InterOil "has very little cash and it's burning through it at a tremendous pace."

And then there's Lennar Homes. The litany of problems in the homebuilder market stretches from Tampa to Topeka in single-spaced newspaper font, but Lennar is a weakling even in that notorious industry. Sales are shrinking rapidly, earnings have been massively negative, and Lennar has three times more long-term debt to service than cash on hand. Lennar has "the worst fundamentals among the major builders," according to CAPS member SeekBalance. What's to love? Not much.

Here be dragons
As Vonage shows, there's a flip side to every story and you should never make investment decisions based on just a screen. But finding the stocks most hated by the finest stock pickers in CAPS is a great starting point for short-sellers and put buyers.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Amazon.com is a Motley Fool Stock Advisor choice. Try any of our Foolish newsletter services free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.