Wall Street hates the companies listed below. So why do our Motley Fool CAPS members disagree? They've bestowed on these companies the highest four- and five-star ratings, signaling their faith that the associated businesses will outperform the market.
So who's got it right? The professional class of analysts sitting in their paneled offices smoking stogies, or a motley crew of community investors pooling their best thoughts for others to share? We think we know who'll come out ahead. How about you?
|
Stock |
CAPS Rating |
Wall Street Bearish Sentiment |
|---|---|---|
| China Yuchai International (NYSE: CYD) | **** | 50% |
| Denison Mines (NYSE: DNN) | **** | 50% |
| Pain Therapeutics (Nasdaq: PTIE) | **** | 67% |
Source: Motley Fool CAPS.
Investing requires close diligence on your part, so use these ratings as a launching pad for your own research.
A heavy burden
The truck industry in China hit the road last year, with sales of heavy-duty commercial vehicles surging 60% to more than 1 million vehicles. When medium-duty trucks and medium- and heavy-duty buses are included, the total commercial vehicle market stands north of 1.4 million vehicles and helps explain why China Yuchai International has largely succeeded as the country's leading diesel engine maker.
The robust nature of the growth trend has attracted U.S. engine and truck makers, too, with Cummins (NYSE: CMI) and Caterpillar staking a claim in the market.
Yet Wall Street thinks such torrid growth can't be maintained, and they're looking for 2011 to be an off year before the market continues the next leg up in 2012, though at a much more moderate pace. No doubt that explains the mixed feelings analysts have about China Yuchai, but CAPS members are likely looking at the engine maker's ability to expand margins across the board even as it sports valuations that make it still look exceptionally cheap.
CAPS member CRACKTACTOR thinks China Yuchai has its fingers in all the right pies to continue growing:
If one can muster the courage to ignore our inherent fears about Chinese securities, this is a good bet. After all, the building boom continues, and there's not an industrial application that these guys don't make an engine for...
Add the engine maker to your watchlist then head over to the China Yuchai International CAPS page and let us know if you think it's got what it takes to keep on trucking.
Still a glowing opportunity?
Although the Japanese Fukushima nuclear reactor meltdown accelerated the decline in Denison Mines' stock, at least briefly, there's no getting around that it was falling rather sharply before the disaster. In February, it hit the highest level it's seen since 2008, but now trades at more than half off those prices.
Denison is not alone in the price action of its stock, as many of the major uranium miners also peaked before the Japan earthquake, an event that only hastened their decline. Top miner Cameco (NYSE: CCJ) was on the way down when the calamity struck, as was Uranium Resources (Nasdaq: URRE) -- though its peak occurred last December.
The problem for Denison and the others is the unwelcome glare that's been cast on the industry in the wake of the tragedy in Japan. While President Obama has offered his commitment to the industry, the players are in a state of flux that many investors see as lingering for a while. CAPS member Steve2737 thinks it could take years for Denison to recover:
Uranium stocks cut in half from Japan crisis. long term everything looks like huge upside. Maybe a couple of years but will easilt double from current price $2.34
If you want to keep tabs on the uranium miner's progress, add Denison Mines to the Fool's free portfolio tracker.
Not a painful decision
You have to like the prospects for Remoxy, the treatment being developed by Pain Therapeutics and Pfizer (NYSE: PFE) to counter the ease drug abusers show in converting OxyContin into a more potent drug. In clinical trials, drug abusers disliked Remoxy presumably because it hindered their ability to extract the active compounds from it.
As the Fool's Brian Orelli notes, the FDA is requiring all opioid drugmakers to come up with plans to limit the abuse of their drugs. A therapy like Remoxy fits neatly into that playbook, because if drug abusers hate it, then the regulators are going to love it. That's precisely why CAPS member jabcoinc believes Pain Therapeutics will ultimately succeed: "FDA rolls this engine along with recent rulings regarding pain management policies after prior industry (FDA led) direction some blame for the pill mills and such. Worth a read."
Add Pain Therapeutics to your watchlist then head over to the Pain Therapeutics CAPS page and disabuse analysts of the notion of why it will fail.
What's wrong with that?
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