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 analysts covering them, 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.
Wall Street Picks
Source: Yahoo! Finance and 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 buy or sell them based solely on their appearance here.
Hiding in plain sight
In 1968, McDonald's
That's the type of opportunity CAPS member TMFTypeoh foresees in Brazilian franchisee Arcos Dorados, which has more than 1,700 restaurants scattered throughout Latin America, making it the world's largest McDonald's franchisee. Almost 30% of its restaurants are located in Brazil, while another 27% are dispersed over Argentina, Chile, Colombia, Ecuador, Peru, Uruguay, and Venezuela. Says this CAPS player: "Risky, but its like investing in MCD 30 years ago. If it holds true, we've got a multibagger!"
Unlike its spinoff Chipotle Mexican Grill, McDonald's still gets a nice cut of Arcos' profits. And profitable it is. Revenue in the first quarter jumped 57%, fueled by a 12.6% surge in systemwide comparable sales, but driven largely by a better-than-9% increase in Brazilian same-store sales. Profits grew 59% in the quarter, to $35.5 million. The risk, of course, is whether the Latin American growth opportunity will be similar to the U.S. experience over the past several decades.
Burger King thinks so, and wants to grow its restaurant base from the current 100 stores to 1,000 over the next five years.
Let us know on the Arcos Dorados CAPS page whether you think an investment in the burger joint is like going back to the future.
Worth its weight in gold
Under grilling from libertarian Republican Congressman Ron Paul, Fed Chairman Ben Bernanke had hinted at another round of quantitative easing, the easy-money policies that critics say have fattened corporate profits without doing anything for the economy. Gold and silver prices soared on the suggestion and the dollar tanked. Today, Bernanke was telling a different story, saying the Fed isn't about to launch a new capital infusion program, at least not yet.
While gold has maintained its lofty levels -- since people view it as both an asset and as money, regardless of what Bernanke thinks -- silver is seen as more of an industrial metal, and its fortunes more closely track views on the economy, explaining its drop from $50 an ounce to around $35.
Even at these prices, Endeavour Silver should be a profitable investment since it has cash costs below $5 an ounce, more comparable to Coeur D'Alene Mines'
Cheap is for me
Taseko Mines is also suffering from the slump in industrial metals. Copper prices are rising again and analysts expect them to peak this year, before slumping again over the next two. Taseko, Southern Copper, and even Freeport-McMoRan
Taseko, though, sees a better opportunity from its molybdenum holdings. Where output on copper was flat in the second quarter, its moly production jumped 38% and it's looking to expand. The miner's lower stock price makes it a much more attractive rebound candidate and CAPS member tc4311 says it's worth the wait: "Very undervalued at these levels - once Prosperity gets on track these shares will jump up. I'm willing to grab some now and wait until that happens."
Add Taseko Mines to the Fool's free portfolio tracker and see if you get what you pay for.
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.
The Motley Fool owns shares of Chipotle Mexican Grill. Motley Fool newsletter services have recommended buying shares of Chipotle Mexican Grill and McDonald's. Motley Fool newsletter services have recommended creating an iron condor position in Chipotle Mexican Grill. 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. The Motley Fool has a disclosure policy.