Short-sellers and hedge funds may be shadowy, but sometimes they are the smartest guys in the room. They've done their homework, and they're 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've also got leading analysts 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
As gold continues its inexorable climb to record highs, investors continue to search for new ways to mine profits from it. Not content with major miners like Barrick Gold
Gold Resource fits that latter definition, and although it announced the commencement of underground mining and stockpiling at its La Arista mine project in Mexico, it admits none of the mineralized material at its properties meet the SEC's definition of proven or probable reserves. That raises red flags for CAPS All-Star metoo105:
Be aware that here you are investing in a company that has spent millions and raised millions which does not have a working mine or any reserves yet has a billion dollar plus market capitalization!!!
Normally, I am quite open-minded to non-producing companies with assets in the ground. This is not that. This is a company that has been built by stock promoters. All should watch out!!
Certainly, of the $2.8 million in general and administrative expenses it reported for the quarter, more than half was in the form of stock-based compensation and equaled the company's operating loss for the quarter. Let us know on the Gold Resource CAPS page whether there's a nugget of opportunity here.
Get down on one knee
Along with Markel
After a disappointing third-quarter earnings report showing higher expenses exceeding a respectable 30% increase in revenues, Leucadia's stock is once again on the move and within striking distance of its 52-week highs. Yet based on next year's estimates, it goes for just 11 times earnings, half the valuation assigned to Markel.
About 98% of the more than 1,200 CAPS members rating Leucadia see it as a value able to outperform the broad market averages, but only you can decide whether it belongs in your portfolio. You can track its progress by adding it to your watchlist and have all the Foolish news and analysis about this stock aggregated for you in one place.
What's so special?
A Piper Jaffray analyst suggests Apple
The "Mac for the masses" is carrying along a number of tech leaders on its coattails, including Qualcomm, which will be featured in the new, thinner iteration expected out early next year. It will have edged out Intel, which is buying up Infineon, the current supplier of radio chips. The chip giant seriously misjudged the mobile market and is trying to make up for lost time.
Growth of smart phones, especially Droid and the possibility of adding the Apple iPhone and iPad will lead to continued above-market growth (10%-12% per year). Insider ownership is OK, clean balance sheet.
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.
Berkshire Hathaway, Intel, and Markel are Motley Fool Inside Value selections. Apple, Berkshire Hathaway, and Leucadia National are Motley Fool Stock Advisor recommendations. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of Apple, Berkshire Hathaway, Markel, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.