7 Low-Rated Stocks That Soared

Successful investing requires you to think independently and stick to your convictions. That's hard enough with stocks that are generally popular -- after all, in the stock market, there's a seller for every buyer. But it gets even tougher with stocks that can't seem to find good press or bullish investors anywhere. Of course, defying popular opinion has led many contrarian investors to great returns.

In that spirit, I've headed to Motley Fool CAPS to dig up some unloved stocks that have delivered big gains to shareholders over the past month. Our community of investors has put each of these companies on the bottom two rungs of the CAPS rating scale:

Now, given CAPS' knack for accurately gauging winners and losers, I'm not recommending that you run out and buy these stocks! An index set up to short CAPS' least-liked stocks has outperformed more than 96% of all other CAPS players. That said, CAPS players have proved overly negative on some high-performing stocks. Are any of the stocks in the table above the same sort of undercover rockets?

Providing the pep
It's been a wild ride for Circuit City shareholders over the past few months. Since early January, the stock has closed as low as $3.66 per share and as high as $5.42 as investors have tried to figure out whether the company's future will be less like a sad country song than its present situation. Over the past few quarters, Circuit City has struggled with slumping sales and a flood of red ink as it has tried to deal with economic realities while competing with industry leaders like Best Buy (NYSE: BBY) and discount giants like Wal-Mart (NYSE: WMT).

The troubles have made the company a target for activist shareholder Wattles Capital Management, which wants to throw out the entire Circuit City board and put a bunch of its own nominees in place. Apparently it has lost pretty much all confidence in the ability of current management to turn things back around.

Meanwhile, the company did actually manage to make money in its recently announced fourth quarter. It wrangled $0.03 per share in the quarter, well above the $0.07 loss that analysts were predicting. The profit was hardly worthy of a full-on celebration though, and the company reported that revenue declined 8% from the prior year.  

Combing CAPS
Investors' sentiments on CAPS have been anything but in alignment with the upturn in Circuit City's stock. Overall, the bearish sentiment on Circuit City has overwhelmed the bulls and the stock has a lousy one-star rating. One highly ranked player, Gtrinvestor, gave the stock a thumbs-down back in January, saying that "This one just can't seem to get out of its own way. The constant onslaught of cheaper internet sources for electronics, and Best Buy's better execution are killing [Circuit City]."

There are some investors on CAPS for whom hope springs eternal when it comes to Circuit City, and they've gotten bullish thanks to the stock's big drop. Most of these investors have a similar thesis to CAPS All-Star epetroel, who says, "at $4.50 it seems really cheap," and thinks that if management can get its act together -- or Wattles can successfully get it to walk the plank -- there's "a big comeback in store for them."

So what's your take? Is there good reason to get more bullish on Circuit City right now, or are its winning days numbered? Head over to CAPS and let the community of more than 96,000 Fools know what you think. While you're there you can start your research on any of the other stocks listed above or any of the 5,500 stocks rated by the community.

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