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; NA = not available.

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. 

Hiding in plain sight
After the initial enthusiasm AEterna Zentaris enjoyed following positive data Keryx Biopharmaceuticals (Nasdaq: KERX) released on its colorectal cancer treatment perifosine (the stock more than doubed in a month), AEterna has settled down again and awaits the next batch of results.

AEterna licenses perifosine to Keryx and is counting on its strategic partnership with Keryx for perifosine to generate a substantial portion of its future revenues. While the data is heartening, and despite having received both fast track and orphan drug status, if perifosine gets approved it will be facing generic options form Bristol-Myers Squibb (NYSE: BMY).

Naturally the immediate focus is on the cancer therapy, but many CAPS members like ebitdat take note of AEterna's pipeline in determining its ability to outperform the market: "Like perifosine and the other drugs in its pipeline. Should continue to generate enough cash from partnership to see trials to completion."

To determine whether AEterna Zentaris belongs in your portfolio, and to know how many similar businesses already occupy your stable of investments, be sure to add it into the Fool's free portfolio tracker, My Watchlist.

All charged up
Exact Sciences is also targeting colorectal cancer, but through diagnostic testing procedures. Last month it acquired the rights to two markers obtained from a patient's stool while readying itself for a growth spurt by filing for a $150 million shelf registration. It says it doesn't need the cash right now, but the registration gives Exact the wherewithal to raise money in a hurry if conditions are right.

An easy comparison for investors to make is between Exact Sciences and Sequenom (Nasdaq: SQNM), which also uses markers for diagnostic tests, but in its case for Down syndrome. While both have reported losses, Exact trades for 70 times sales and 17 times book compared to Sequenom, which goes for just 12 times both metrics. It might seem at current prices Exact is a pricier bet than its peer.

Certainly CAPS member Ak66 seems to agree with that assessment, but it can't be forgotten that Sequenom ran into much publicized problems with its data and MALIBUMIKE says Exact has avoided such pitfalls.

This company is poised to skyrocket. It has FDA approval for clinical trials in 2011 after its testing came back 100% accurate. They expect FDA approval for the marketing of the product in 2012. Their expected profits are in the billions. This stock has gained more than 7 times my original investment and I am staying in for the long haul.

A utility player
Swinging from biotech to green tech, biofuels producer Rentech has been attempting to bottle the lightning of alternative fuels. Last year it scored deals with the military and a number of airlines to test out its proprietary biomass output, but lately has been in a tailspin from lower selling prices. Like industry peer Syntroleum (Nasdaq: SYNM), the alt fuels business has been a rocky one for Rentech.

Despite that, 88% of CAPS members rating the alternative fuels maker believe it will go on to outperform the broad market averages with source1pc thinking Rentech's industry contacts are what sets it apart.

This company is positioned superbly to take advantage of our administration,s focus on reducing this country's dependance on oil. RTK has the Proven product, process and contracts with civilian airlines as well as our military to deliver synthetic jet fuel . With loan guarantees from government and or funding from private sources to support facility developement this stock will "soar"

Let us know on the Rentech CAPS page whether it fuels your drive to seek out alternative energy plays.

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.