These Underdogs Are No Dogs

Short-sellers and hedge funds may be shadowy, but sometimes they are the smartest ones in the room. They've done their homework and are willing to bet their capital against the crowd -- an investing strategy that can be as lucrative as it is contrarian.

On Motley Fool CAPS, we also have investors who find the chinks in a company's armor and correctly call its fall. Our "Underdogs" have earned 100 or more CAPS points by correctly predicting that one or more stocks would underperform the market. However, we're going to focus on the stocks these top members expect will outperform the market. If these CAPS investors have scored big by correctly predicting which stocks will fail, it may be worth our while to see which others they think will succeed.

Not every short sale goes as planned, making shorting a risky proposition. Stock prices can be irrational longer than you have money to stay in the game. So don't use this as a list of stocks to sell or buy -- just the launching pad for further research.

Underdogs still wag their tails
The PIIGS look like they're in trouble again, with Ireland about to be forced to take a bailout, Greece admitting it is breaching conditions of its bailout, and Portugal on the brink of needing a bailout. Add in China severely cutting back on its go-go growth policies, and the world of commodities is taking it on the chin over concerns about growth. While gold's status is prominently chronicled, other metals like copper and zinc are taking a hit because China is the world's biggest consumer of both.

Investors should expect that Freeport-McMoRan (NYSE: FCX), which mines both gold and copper, will be affected, but Ivanhoe Mines will feel the brunt of the collapse in demand, too, while it constructs the world's largest copper and gold mine. Rio Tinto (NYSE: RTP), a strategic partner in the venture with a 34.9% stake, won't fare too well, either, if China clamps down too hard on economic expansion.

CAPS member ciipher has fingers crossed for Ivanhoe during this latest threat.

copper,gold,next to China. In Russia. Canadian Company Doing the grunt work. If the social [environment] remains stable,and harmony reins supreme.It could be a major winner.

Let us know what you think on the Ivanhoe Mines CAPS page.

Knee-high to a robot
As Intuitive Surgical (Nasdaq: ISRG) and Accuray have proven, robotics is the future of surgery, providing a minimally invasive way for doctors to perform necessary procedures. While the da Vinci system shines in cardiac surgery and the CyberKnife in cancer treatment, MAKO Surgical is applying robotics technology to knee replacement, with a look toward other orthopedic procedures beyond the knee.

MAKO Surgical's third-quarter sales rose 79%, and losses narrowed on greater system sales and increased volumes of procedures performed. Like its peers, the company has suffered from constrained capital spending by hospitals, but as purse strings open, sales and growth should pick up.

More than 91% of the CAPS members rating the company think it will outperform the market, and I've added my vote for it, too. But only you can decide whether MAKO Surgical belongs in your portfolio, so track its progress by adding it to your watchlist. All the Foolish news and analysis about this stock will be gathered for you in one place.

What's so special?
Shares of Warner Chilcott fell 10% last week after the specialty pharmaceutical company posted disappointing quarterly results despite getting a boost from the pharmaceutical business it purchased from Procter & Gamble (NYSE: PG) last year. Although Warner Chilcott beat analysts' earnings expectations, revenues came in well short of forecasts because generics cut into sales.

CAPS member Indymonkey writes that Warner Chilcott is a short-term play on a bounce back. But the company raised guidance for the year, saying its integration of the P&G portfolio is going better than expected.

Put the company into the Fool's free portfolio tracker page and then head over to the Warner Chilcott CAPS page and give us your thoughts.

There's no need to fear ...
Underdogs often shine brightest with their backs against the wall. Still, it takes more than a few All-Star picks and a quick paragraph to make buy or sell decisions. Start your own research on these stocks on Motley Fool CAPS, where your opinion can still save the day. While there, you can 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.