We're back again this week to search out the highest-rated stocks that the pros on Wall Street aren't following. Remember why we do this:

  1. Underfollowed small-cap stocks offer great returns.
  2. Wall Street is covering fewer stocks than ever before, making now a great time to start looking for mispriced small caps.

Our MO
The modus operandi here is to highlight a few, specifically five, stocks that are covered by three or fewer analysts but have also received five-star ratings in Motley Fool CAPS.

What's CAPS? It's a brand-new community intelligence database that currently has nearly 10,000 professional and individual investors rating stocks. In turn, every investor is ranked, as is every stock. So as more people participate and more time passes, we hope to be able to determine the best investors and the best stocks around.

Given that thumbnail sketch, hopefully you can see why CAPS has unprecedented potential to shed light on promising small caps. At our Hidden Gems small-cap service, for example, there are roughly six of us who contribute ideas in a given month. But if you look at the list below, you'll see that at least three times that number have offered their opinions on these small companies in CAPS.

The list
So without further ado, here are five more five-star stocks that Wall Street may not know about:


CAPS Investors Covering

Analysts Covering

Current Analyst Consensus*

NewMarket (NYSE:NEU)








Allis-Chalmers Energy (AMEX:ALY)




International Coal (NYSE:ICO)




Homex Development (NYSE:HXM)




*Data from Thomson Financial.

These stocks are offered up as ideas for further research. In fact, I encourage you to look into all of them, and I'll get you started by saying that as a homebuilder in Mexico, Homex is certainly in an interesting position to profit from that country's potential economic growth. And the nice thing about researching stocks like these is that we're likely to learn something that Wall Street doesn't already know -- an impossibility if you're looking at companies like Palm (NASDAQ:PALM) and Ford (NYSE:F), which are covered by small armies of analysts.

Get started by reading the analyses investors have offered in CAPS about these stocks and thousands more. And if you'd to like to add your own, you can do that too. Just click here to join the free beta test of CAPS today.

Tim Hanson does not own shares of any company mentioned. Palm is a Motley Fool Stock Advisor recommendation. The Fool's disclosure policy assures you that no stocks were harmed in the writing of this article.