Like the song says, investors are looking for stocks to love in all the wrong places. They'll pile into the momentum stocks everyone else buys, but ignore lesser-known opportunities for fear of straying from the crowd.

Yet the search for undiscovered jewels has informed many of our Motley Fool Hidden Gems picks, from Guess? to Infinera. Overlooked by Wall Street and Main Street, and thus undervalued, these stocks hold the best potential to deliver outsized returns.

The Motley Fool CAPS community knows a bargain when it sees one. Below, you'll find several under-the-radar stocks that brim with promise. These companies have garnered 100 or less active recommendations on CAPS, though the community thinks they still have outsized potential.


CAPS Rating
(out of 5)

No. of Active Picks

Est. EPS Growth Next Year

Brigus Gold (NYSE: BRD) ***** 71 NA
Emdeon (NYSE: EM) **** 52 15%
Invesco Mortgage Capital (NYSE: IVR) **** 80 8%

Source: Motley Fool CAPS; NA = not available.

Naturally, we want you to look a bit closer at these stocks before buying. Maybe investors are staying away from these stocks for a reason so make sure there's nothing seriously wrong with the company before you plug it into your own portfolio.

Under the radar
Come Dec.31, Brigus Gold will be an unhedged miner at the same time its Black Fox mine is producing better yields. That has the potential to make Brigus a possible takeover target, not to mention a top gold stock next year, in the same class as Alexco Resource (NYSE: AXU) and Rubicon Minerals (NYSE: RBY).

Held back by gold hedges below $900 an ounce, Brigus should benefit from prices trading north of $1,400 an ounce. It also just settled a dispute with its Mexican exploration project that should generate nice revenues over the next few years from its sale.

While the company remains generally unknown to the market at large, more than 98% of the CAPS members rating the junior miner think it will turn in market-beating performances. If you're not sure whether Brigus belongs in your portfolio, add it your watchlist and have all the Foolish news and analysis about the stock aggregated in one place.

Good for what ails you
Health-care billing specialist Emdeon has proven adept at connecting payers, providers, and patients in a cycle of revenue management, providing eligibility and benefits verification, payment distribution and denial management, and collections.

Any attempt by incoming legislators to dismantle the new health-care law won't be clear or easy, and Emdeon's services are the sort that should benefit from the stated goals of cost reductions. Also reaching for a share of the pie will be Ingenix, the health-care IT and services division of UnitedHealth Group (NYSE: UNH), and RelayHealth, McKesson's (NYSE: MCK) Web-based communications platform to connect doctors and patients.

CAPS All-Stars are unanimous in believing Emdeon will grab the lion's share, members generally rate it highly, and so do most Wall Street analysts. So be sure to add it into the Fool's free portfolio tracker then head over to the Emdeon CAPS page and let us know if it has the right prescription for growth.

In hot pursuit
Chasing yields remains a dangerous pursuit, though investors are increasingly having a hard time passing up Invesco Mortgage Capital's dividend, which is currently yielding more than 18% annually, putting it on a list of the highest yielding REITs.

With third-quarter profits quadrupling, investors may be more sanguine about the risks associated with the REIT, which manages and finances residential and commercial mortgage-backed securities.

CAPS member TheGraham isn't one to jump on the dividend bandwagon here, but in general sees Invesco Mortgage Capital as being able to grow cautiously in an improving environment:

I'm not sure how some of the bulls on IVR are pointing to a 'stable dividend' here as a positive sign, as the financials on this company go aaaaaaall the way back to...2008. Give me a 10 year history of growth and steadily increasing dividends and THEN we can talk about stability.

Nevertheless, as a REIT I expect this company to take full advantage of the low interest rates at least over the next year. 2012 is up for grabs...

Add Invesco to the Fool's free portfolio tracker to keep on top of all the news and analysis about this biotech's potential.

Keep a high profile
We've had three stocks today that hold a lot of promise that investors want to get behind, but possess equally persuasive arguments for swearing them off. It's why you need to look beneath the headlines and press releases to get a more full picture of where your money is going.

Also check into Motley Fool CAPS and tell us whether these low profile stocks are on their way to higher returns.

McKesson and UnitedHealth Group are Motley Fool Inside Value picks. Infinera is a Motley Fool Rule Breakers selection. McKesson and UnitedHealth Group are Motley Fool Stock Advisor recommendations. Motley Fool Options has recommended writing puts on Infinera. Motley Fool Options has recommended a diagonal call position on UnitedHealth Group. The Fool owns shares of Guess?, Infinera, and UnitedHealth Group. 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.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in the article. You can see his holdings here. The Motley Fool has a disclosure policy.