It pays to be skeptical when you invest. In addition to doubting what the analysts tell you, you often have to discount what the companies tell you, too. On Wall Street, going against the grain can reap huge rewards. Like baseball's greatest place hitter, "Wee Willie" Keeler, great contrarian investors such as Benjamin Graham, Warren Buffett, and John Neff "hit 'em where they ain't."

Today's new breed of contrarian investor can be found at Motley Fool CAPS, where our savvy Fools are willing to see both the upside and downside of a stock. Although their often negative opinions peg them as "skeptics," their top CAPS ratings mean they're right far more often than not. And when they find a stock they actually believe will outperform, perhaps we should take notice.

Here are some recent picks from our list of Foolish CAPS skeptics:


CAPS Rating (Out of 5)


Player Rating

Sigma Designs (Nasdaq: SIGM)




Potash Corp of Saskatchewan (NYSE: POT)




Union Pacific (NYSE: UNP)




Interactive Intelligence (Nasdaq: ININ)




ImClone Systems (Nasdaq: IMCL)




Just as a list of their worst stocks would not be a list of stocks to short, this list of the skeptics' favorites isn't automatic buys. But they do offer an excellent starting place for your own future research.

Skeptically skeptical
Oftentimes in investing, it's not nearly enough that a company succeeds, but that others should fail. That seems to be the case with the latest news about ImClone Systems rival Genentech (NYSE: DNA), whose drug Avastin was found to have little impact on the overall survival rate of lung-cancer patients. That assessment might seem harsh until one realizes that ImClone's Erbitux is being positioned in the same market and that a prior late-stage study for it showed the opposite results of Avastin.

Avastin earned $2.3 billion in sales for Genentech in 2007, and ImClone would like to see a large part of those sales going to Erbitux. Moreover, with half of all cancer patients not eligible to take Avastin, there's a $4.5 billion market in the U.S. and Europe that could be left to ImClone. With the field becoming more level for ImClone, it's little wonder that it saw its shares soar to a three-year high yesterday.

With earnings due out this week, investors are betting that ImClone has a host of positive news to report. CAPS player iwatt thinks other drugs in ImClone's pipeline will have a healthy prognosis as well: "Volume and price spiking just before earnings. ... I'm going to bet that cetuximab has been selling well."

Others see data from future clinical trials pushing ImClone higher while a pipeline of therapies bodes well for keeping revenues flowing. As prosper21 noted in January: "[Upcoming presentation] of Phase 3 data from Flex Study around June 2008 ASCO conference should make this stocks a great speculative buy not to mention a great pipeline and great chance of a [buyout]."

ImClone has come a long way since the Martha Stewart insider-trading scandal. Erbitux, the one marketed drug ImClone has, brings in some $1.3 billion in revenues for the company and partners with Bristol-Myers Squibb (NYSE: BMY) in the U.S. With other pipeline candidates also looking up, it's understandable why a skeptic might take a favorable view of this company.

Seeing past the obvious
Skeptics know that just beyond the storm clouds lies a shimmering morning. Conversely, the sun can't shine forever, whatever the crowds may think. What's your forecast? Drop by CAPS, and tell us which stocks are your favorite contrarian picks.

Interactive Intelligence and Sigma Designs are both recommendations of Motley Fool Rule Breakers. Don't be skeptical about the 30-day free trial offer available for this newsletter service.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.