Hidden Stocks for High Returns

To paraphrase the song, 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. 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.

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.

When you're hot, you're hot
Ignore the production setback that commercial-truck parts supplier Accuride recently reported. As a result of not being able to meet burgeoning demand from its primary OEM customers along with aftermarket customers, it had to cut back guidance. Sure, it had some quality-control issues, too, but Accuride should be able to navigate this detour.

The maker of wheels for truck and trailer manufacturers suddenly found itself with customers who wanted both its standard steel wheels, but also aftermarket aluminum wheels, which happily carry higher margins. Unfortunately, until its new aluminum-wheel facility gets the kinks out (startup costs are running higher than expected), it won't be able to satisfy both groups.

All this amounts to something of an inauspicious beginning for a company only recently emerging from reorganization, but the fact that there is such high demand bodes well for the future, even if that means it's leaving some money on the table at the moment.

Trailer maker Wabash National (NYSE: WNC), for example, missed its earnings numbers last month despite nearly doubling revenues, but the company insisted it was just a timing issue that caused the shortfall and that future quarters would prove the demand was there. Navistar, one of Accuride's OEMs, also missed earnings, but that was a result of reorganizing its business lines; truck sales were 33% higher.

All nine CAPS All-Stars who have weighed in think Accuride ought to outperform the indexes, and its top five-star rating shows that the investor community believes it has at least a better than fighting chance of success. Add Accuride to your watchlist for complete coverage of its developments.

An expensive proposition
According to the Brewers Association, craft brew sales are running well ahead of last year, which itself was a pretty good year for beer makers not named Anheuser-Busch InBev (NYSE: BUD) or Molson Coors. Craft beer made by the country's small breweries jumped 15% in the first six months of 2011 compared to a 12% gain a year ago -- a pretty amazing feat since overall beer sales are down almost 1%.

Samuel Adams maker Boston Beer straddles both sides of the fence. It actually outgrew the definition of "craft brewer" because sales had been so strong, but the trade group redefined what made a craft brewer and it now sits atop the heap again.

Craft Brewers Alliance, a conglomeration of smaller breweries like Redhook Ale, Widmer Brothers, and Kona Brewing, is a decidedly smaller operation than Boston Beer. When the Sam Adams maker reported $146 million in quarterly revenues selling 651,000 barrels, Craft Brewers reported less than $42 million in sales on 191,000 barrels.

Some, including CAPS member TMFBiggles, say that makes the stock a better buy.

Cheaper than SAM and with better growth potential. The beer industry is flat to declining, but that doesn't mean that certain brands won't outperform the average. I think this company will. They have a good market niche -- not a beer snob's beer, but a solid and solidly priced microbrew for people looking to trade up from Bud Light.

Drink in what others are saying on the Craft Brewers Alliance CAPS page, and add the stock to the Fool's free portfolio tracker.

Through a cracked lens
Can there still be a gold miner flying under everyone's radar, particularly with a star-studded pedigree? Primero Mining is just that company, born from a deal that took the San Dimas mine from Goldcorp (NYSE: GG) and Silver Wheaton (NYSE: SLW), which had rights to its silver production. In return, however, Goldcorp still has a 36% stake in the miner, and rather than rights that expire in 2029, Silver Wheaton now has a guaranteed lifetime stream from the mine.

The potential Primero holds has the Fool's precious-metals guru, Christopher Barker, calling it the greatest gold stock in the world. It's sitting on 866,000 ounces of gold worth around $1.4 billion at today's prices. Particularly now that shares trade 60% below their 52-week high, it seems to be trading at an extremely attractive price and could be why everyone thinks it will outperform the broad market indexes.

Add Primero Mining to portfolio tracker and see whether it can live up to the very high expectations investors hold for it.

Keep a high profile
We've had three stocks today that hold a lot of promise and that investors want to get behind, but that possess equally persuasive arguments for swearing them off. That's why you need to look beneath the headlines and press releases to get a fuller 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.