Wall Street's Best Hidden Stocks

When asked for the secret of his success, baseball player Wee Willie Keeler replied, "Hit 'em where they ain't." What worked for Willie at the plate applies equally well in investing. 

Seeking stocks that others ignore, shun, or simply forget gives individual investors like you an edge over the professionals. When Wall Street turns a blind eye, you have a chance to get in before these stocks get discovered -- or rediscovered -- and start taking off. 

Below, we'll check out companies with only a handful of analyst coverage, then pair our list with the opinions of the Motley Fool CAPS community. A stock that garners CAPS' top ratings, but hasn't yet caught analysts' attention, could be your next home run investment. 

Source: Yahoo! Finance; Motley Fool CAPS; NA = not available.

Remember, without much analyst support, you'll have to do your own scouting to see whether these stocks deserve a spot on your portfolio's roster. Don't just buy or sell them based solely on their appearance here. 

Hiding in plain sight
Pundits have written plenty about the glut of ships sinking the shipping sector. Whether it's Frontline (NYSE: FRO) in the oil tanker market, or DryShips (Nasdaq: DRYS) in the dry bulk niche, the collapse of charter rates has led shippers to slow steaming tactics, suspended dividends, and a general collapse in value among industry players.

So why would Eagle Bulk Shipping, which got swamped by the rogue wave of the Korea Line bankruptcy, be a good investment? With still more ships expected to come on line over the next few years -- Eagle has six Supramax under construction in China that it will take possession of this year -- the outlook for rates doesn't seem encouraging. Furthermore, Eagle has $98 million in cash on its balance sheet, but nearly $1.2 billion in long-term debt.

Despite its precarious perch, Eagle has chosen to mix up its charter rate schedules, dividing them between long-term charters and the spot market. Many of its newest vessels have long-term charters, some with contracts as long as eight years. When rates rise, long-term charters can keep a company from booking juicy gains. But in depressed markets like this one, short-term rates can force shippers to accept payments that don't cover their operating costs. Maintaining a mix of short- and long-term rates gives shippers greater stability.

Eagle trades at just 22% of its tangible book value, and for a stock that trades for $2.30, it has $1.56 per share of cash on hand. (Just don't forget its whopping debt). CAPS member Teacherman1 admits that it may be a speculative investment, but thinks investors have oversold the dry bulk sector, and believes that Eagle is better off than many industry peers.

Let us know in the comments section below or on the Eagle Bulk Shipping CAPS page what you think the chances are for a rising tide to lift this boat.

Do the economics make sense?
For a time, it seemed the natural gas industry was just as dead as the shipping industry. Prices for nat gas fell to historic lows, as a glut of rigs kept drilling away. New techniques for tapping into previously inaccessible deposits, such as horizontal drilling, kept the gas flowing. 

While Precision Drilling Trust primarily drilled for natural gas, it's seen more of its rigs used to hunt for oil as that commodity's prices rise. These days, Precision has only 30% of its active rigs drilling for natural gas, and it's drilling for more oil than it ever has over the last 20 years.

Other drillers such as EOG Resources and SandRidge Energy (NYSE: SD) are also devoting more assets to oil these days. As Chesapeake Energy's CEO Aubrey McClendon noted last year, "The economics just compel you to look for oil rather than natural gas right now."

Of the 1,670 CAPS members weighing in, 98% rate Precision to outperform the broad market averages. Drill down further on the Precision Drilling Trust CAPS page, or add it to your watchlist, and watch which way it moves next.

A big hole
Minimally invasive surgical procedures are all the rage now, helping patients heal faster and cutting hospitals' costs in the process. Vision-Sciences' flexible video endoscopes help doctors cut down on exploratory surgery by exposing areas not readily visible to the eye. The company's further created a renewable revenue stream with a single-use disposable sheath placed over the insertion tube to minimize cross-contamination.

Fourth-quarter sales jumped 61%, and a new distribution agreement with Stryker (NYSE: SYK) has Vision-Sciences looking to expand sales further while turning operating losses into profits.

Wall Street hasn't discovered Vision-Sciences yet, but 95% of the CAPS members rating it -- and all of the All-Stars -- believe it will beat the market indexes. Add the medical device maker to the Fool's free portfolio tracker and scope out its new opportunities for growth.

Swing for the fences
When seeking investments where no one else is looking, Motley Fool CAPS is the best place to start your own research. 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. 

Sign up today for the completely free service, and tell us whether these hidden stock opportunities will help us go one up on Wall Street.