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?
CAPS Rating (out of 5)
Wall Street Bearish Sentiment
Source: Motley Fool CAPS.
Now as much as we love our CAPS community, don't sell these companies short just because they've garnered high ratings. And don't go short just because Wall Street says to, either. Investing requires closer diligence on your part, so use these ratings as a launching pad for your own research.
Building a future
According to a survey by Fannie Mae, almost one-quarter of homeowners are underwater on their mortgage while Freddie Mac says home prices continued to decline in the first quarter, down another 2.8% from a year ago. Worse, RealtyTrac says foreclosed houses made up 28% of all residential sales that were recorded in the first quarter of 2011. No wonder homebuilders like Hovnanian, KB Home
But it probably helps explain why analysts have a dour outlook for Encore Wire, which manufactures copper wire products used in the construction trades. The problem for them, however, is that 80% of its revenues come from nonresidential construction. Not that commercial real estate is a vibrant industry these days, but Encore reported unit volumes jumping 29% year over year and the spread between what copper fetches on the market and what its average costs per pound have widened more than 42%.
The commodities bubble that had everyone focused on the price of gold and silver was also pumping up copper. That could help explain why 95% of the CAPS All-Stars rating Encore Wire believe it will continue to beat the Street going forward.
You can bank on it
It's true that a rising tide can lift all boats. But there are exceptions to every rule, and a stronger competitor can stay afloat much longer than its weaker rivals.
Such seems to be the case with India's second largest bank, ICICI Bank, which analysts have apparently confused with the State Bank of India. The government-run financial institution, which commands a quarter of all the deposits and loans made in India, saw its profits tumble last quarter as provisions for bad loans soared. ICICI, on the other hand, saw its profits surge 44% as it enjoyed a substantial decline in bad loan reserves.
The upside is huge. India's growth as a country is different that China or unrest in arabic countries. This is a Banking gem and secret.
Let us know on the ICICI Bank CAPS page whether this is the kind of promise you can bank on.
Think local, act global
With 86% of the CAPS members rating Marchex to outperform the broad market averages, it appears they think its global ambitions will have a localized impact on their portfolios, too. Add Marchex to the Fool's free portfolio tracker to have all the news and analysis about its progress aggregated in a single location.
What's wrong with that?
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Sign up today for the completely free service, and tell us which side of the street will be the ultimate winner.