As an investor, it doesn't pay to follow the crowd.

In this series, though, we highlight a possible exception -- the collective wisdom of our CAPS community. Read the next section if you're unfamiliar with our methodology. Skip it if you want to go straight to the results.

Why this crowd is different
Jumping into a stock because your rich neighbor did, because you heard about it from your friend's uncle who used to work on Wall Street, or because CNBC has been talking about it nonstop is a recipe for disaster.

If there's one thing I've learned as a stock analyst, it's that any stock can be gussied up to sound like a world-beater. If there's a second thing I've learned, it's that being a smart person doesn't make you a good investor.

In the hands of a smart person with good communication skills, the never-were and never-will-be stocks sound like tickets to instant fortune. The ancient Greek philosophers made the distinction between rhetoric and knowledge. The former is convincing; the latter is true.

That's why we factor in track record in our Motley Fool CAPS community. We invite everyone to give stocks an outperform (akin to a "buy" call) or underperform rating (akin to a "sell" call) in CAPS. We then use those opinions to calculate a rating for each stock -- from one to five stars (five being the best). But -- and this is a big distinction -- we give more weight to the opinions of folks whose picks have performed well in the past.

The top 10 specialty retailer underperform calls
So, with that methodology as prelude, I present to you the 10 one- and two-star specialty retail stocks with the most CAPS community member underperform ratings (I used a minimum market capitalization of $100 million and required that each stock be listed on a major U.S. exchange). Remember, stocks are rated on a five-star scale by our CAPS community, so one- and two-star stocks are consensus underperforms.

Company Name

 Market Capitalization (in millions)

52-Week Price Change

Price-to-Earnings (TTM)

CAPS Rating (out of 5)

Underperform Picks

Netflix (Nasdaq: NFLX)






Tiffany (NYSE: TIF)






Barnes & Noble (NYSE: BKS)






OfficeMax (NYSE: OMX)






Jo-Ann Stores (NYSE: JAS)






Office Depot (NYSE: ODP)






Build-A-Bear Workshop












West Marine






Medifast (NYSE: MED)






Source: Motley Fool CAPS. NM = not meaningful.

Folks who have bet against Netflix have lost big-time over the past year. Jo-Ann Stores and Medifast have also put up nice stock price gains. Further, Netflix is one of Motley Fool co-founder David Gardner's favorite stocks. In our Stock Advisor newsletter, he's written that he thinks it's a buy at today's prices. Yet, the CAPS community isn't impressed by Netflix or any of these 10 stocks, rating each of them a consensus underperform.

More CAPS members think Netflix is an underperform than any other specialty retail stock. Part of this is due to its popularity (it also heads up our list of specialty retailer outperform calls), but it rates just two stars. Do you think it deserves this lack of love? Make your thoughts known in CAPS by clicking here. Or just go there to do further research on any one of these hotly debated stocks.

Anand Chokkavelu doesn't own shares of any company mentioned. As mentioned, Netflix is a Motley Fool Stock Advisor selection. The Fool has a disclosure policy.