Welcome to the second-ever Motley Fool Battle Royale! Our Battle Royale features eight stocks among the top 250 of most interest to Fool readers. Those eight stocks are randomized into a standard eight-team tournament bracket, then battle against each other to see which one wins. In this case, "winning" means winning my confidence to select one of these eight as my favorite to beat the market over the next 12 months.

My first Battle Royale got more than 60 recs, so like Sally Field, I'm thinkin', "You like us -- you really like us!" Also, my first champion, Veeco Instruments, is already winning smartly on my CAPS Scorecard, so I'm emboldened now to return to The Arena. Let's see what Mr. Randomizer picks this week.

GONG! The tournament has begun.

Mueller Water Products (NYSE: MWA) vs. Otter Tail (Nasdaq: OTTR)
Mueller Water Products manufactures anything that helps water flow: pipes, hydrants, valves. The stock trades for just more than $3 at a market cap of $496 million, is likely therefore shunned by institutions, and is off nearly 40% over the past year. That said, a lot of people in our CAPS community like this stock, making it a five-star pick.

Pessimistic headlines condemn our aging domestic infrastructure, leading some to see opportunity for Mueller. But studies I've read suggest that U.S. drinking water is remarkably safe, and I enjoy tap water at any restaurant that'll serve it to me.

Otter Tail doesn't excite me, either -- this company buys into other companies, aiming to add value to its diversified portfolio. "At Otter Tail Corporation, we create long-term value by owning diverse, well-run companies..." its website welcomes us. But the five- and 10-year charts show the stock price down; Otter Tail stock has lost long-term value. (I realize some people invest in it for the high dividend.) I wouldn't buy either of these stocks, but at least Mueller better lives up to its billing. With the world's tiniest nod, pass MUELLER WATER PRODUCTS to the SECOND ROUND.

Provident Energy Trust (NYSE: PVX) vs. A-Power Energy Generation Systems (Nasdaq: APWR)
Provident Energy Trust is a Canadian diversified energy company that has generated a high dividend yield and some nice recent capital gains. As CAPS elite member Schmacko puts it in this pitch (paraphrased): "This is a play on Canada, its energy-producing resources, and its currency all in one. As the price of oil goes up, the stock should go up, and as the Canadian dollar surpasses the US dollar, the dividend (in Canadian bills) effectively rises for me when I collect the US cash equivalent."

A-Power, the Chinese power company and wind-turbine manufacturer, has been extensively covered by Fool writer Toby Shute. Of the eight companies in this Royale, this is the one I find the most interesting to study and follow. I suggest new Fools add it to My Watchlist. Admittedly, Toby has put his thumb up into the wind and found questionable long-term viability for this company's wind-turbine business, even though the market's excitement has sent this stock soaring 40% over the past six weeks. I'll take the steady player, thank you: Pass PROVIDENT ENERGY TRUST to the SECOND ROUND.

US Bancorp (NYSE: USB) vs. Neutral Tandem (Nasdaq: TNDM)
Curse the Battle Royale gods for sending me a bank stock. I know some people swear by them (except for 2008, when people were swearing at them). But I really don't like these businesses as an individual investor, because I find their reporting opaque, their consumer-friendliness minimal, and their ability to gain competitive edges based almost purely on size. US Bancorp is a big ($44 billion) player based in Minneapolis and affiliated with my beleaguered Minnesota Twins through the Pohlad family; I want to like it.

Neutral Tandem, a telecom networking company well below its 2007 IPO, owns the tag line "make every minute count," but quick research leads me to believe it has decreasing revenue per minute. The company just cut a cash deal to buy out an Italian peer, but Neutral Tandem -- a low-cost provider (which typically I do not favor) -- runs into patent litigation frequently, and will likely face growing competition. When picking from stocks in which I have no further interest, I'll take the safer, thank you: Pass US BANCORP to the SECOND ROUND.

CenturyLink (NYSE: CTL) vs. Applied Materials (Nasdaq: AMAT)
Another phone company, CenturyLink is an independent local exchange carrier serving up local, long-distance, and high-speed Internet service to customers in 33 states. It's also merging with Qwest, which the market clearly appreciates, having pushed this stock up 25% since the April announcement. The resulting company will be the No. 3 player in telecommunications.

Applied Materials, on the other hand, is a longtime leader in the manufacture of semiconductors. We're definitely nearer the trough of this cyclical industry, but even through the past cycle, I'm sorry to say that AMAT stock has been a net loser for years. It now trades around 55% lower than it did 10 years ago. I'm notoriously bad at calling semiconductor cycles: Pass CENTURYLINK to the SECOND ROUND.

Round 2 preview
I begin the second round eyeing a Final Four of stocks whose businesses are complicated, somewhat abstruse to follow, and (mostly) not helping shareholders much at all over the recent past. But this is Motley Fool Battle Royale, and one of these companies will be standing at the end. Not only that, but I'll pick one of them to join my high-rated CAPS scorecard to hold myself accountable. Even if I'm not in love with any of these companies, I'm on the hook and it all counts!

Mueller Water Products (MWA) vs. Provident Energy Trust (PVX)
Drip, drip, drip.... My leaky support of Mueller drips away in the face of a larger, better-financed, more interesting play on the North American natural gas business, with a much better dividend to boot. Provident has announced that its December dividend will be its final one before the company reorganizes as a full-blown corporation (converting from a trust) for 2011. Its 2011 dividend will decline, but it should still be attractive. And when you consider how generally weak the oil price and industry have been the past few years, I'm impressed at how Provident has held up the past 18 months. Let's diversify into the Canadian dollar, and pass PROVIDENT ENERGY TRUST into the FINALS.

US Bancorp (USB) vs. CenturyLink (CTL)
If you could only invest in one industry over the next year, would it be banks or telecoms? This is the basic bet. If it were a 10-year question, I'd pick telecoms, because I like the technology component, these companies are generally oligopolies with less competition, and they have global markets. But our Battle Royale isn't for a decade -- it's for a year.

Which industry does our community rate higher? Well, that's easy, since Motley Fool CAPS puts predictive forward-looking ratings on each industry. Selecting the Tags option on our CAPS subnav, you'll discover that our community favors telecoms (three-star projected performance) over banks (two stars). Furthermore, telecoms (up 14%) are already outperforming banks (up 3%) over the past 12 months, and I expect that to continue. Pass CENTURYLINK to the FINALS.

The final battle, to the death:

Provident Energy Trust (PVX) vs. CenturyLink (CTL)
I'm not generally a dividend-focused energy stock man, which perhaps explains why Provident holds some interest for me. Maybe we're more interested in the stocks that seem most exotic to us. I do believe that natural gas and oil are steady and rewarding, and I don't harbor any belief that the world will run out of either anytime soon. It's also interesting to note that both these companies are reorganizing -- PVX converting to corporate status, and CTL in the megamerger with Qwest.

But in this case, I'll stick with the smaller fish: the play on Canada and natural gas, with the dividend as a sweetener. If you're interested by Provident, I'd like to point out that they're going to webcast their corporate strategy meeting with analysts Thursday at 10:30 a.m. ET. For this second Motley Fool Battle Royale, I therefore crown PROVIDENT ENERGY TRUST as my CHAMPION!

In conclusion…
Provident and I walk together out of the arena in which it has just survived: America's soon-to-be third largest telecom company, a longtime chip leader, a streaky Chinese windpower company up 40% over the past couple of months, and -- OK, a number of competitors that I personally found either dull or wanting. So maybe Provident didn't really have to overcome much to win this week. Not every Battle Royale event will have equally compelling matchups -- I'm randomizing from a diverse basket of 250 stocks, after all. I never know what's going to show up from week to week.

That said, I'm committed, and I don't take that lightly. I commit to picking PVX right now -- in conjunction with publishing this article -- to beat the market over the next 12 months on Motley Fool CAPS. Given my 99+ CAPS rating, earned patiently over the past four years, this is not a commitment I throw around lightly -- my CAPS scorecard has beaten the market 66% of the time, and by an average of 14 percentage points per pick. So Provident, I'm committed now, and you better not do me wrong!

I will also watchlist the stock on the Motley Fool's new My Watchlist feature. I will also keep it in mind as research fodder for the two services I oversee: Motley Fool Stock Advisor and Motley Fool Rule Breakers, both of which have eviscerated the S&P 500 market average for nearly a decade. I can't say right now whether I think PVX fits the mold, whether it will pass my ultimate test and become a long-term Motley Fool recommendation. 

But as the curtain closes and the cameras pull back from this Motley Fool Battle Royale, I can say one thing with certainty: today, Provident is my champion.

Read last week's battle here: Motley Fool Battle Royale: FTR, BIDU, PM, SRZ, VHC, VECO, NUAN, V

Fool co-founder David Gardner does not own shares of any companies mentioned. Mueller Water Products and Otter Tail are Motley Fool Hidden Gems picks. The Fool owns shares of Neutral Tandem. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.