In a refreshing turn of events, I'll hope you'll follow me today from the overfollowed world of national politics to the underfollowed world of small-cap investing. Why? Unlike national politics:
- Underfollowed small-cap stocks offer incredible rewards.
- Wall Street is covering fewer stocks than ever before, making now a great time to start looking for mispriced small caps.
Our methodology
Unlike Motley Fool Hidden Gems, where our team of just six analysts uses bottom-up, fundamental analysis to ferret out small-cap recommendations, this column uses our brand-new Motley Fool CAPS community-intelligence database, where the ideas of thousands of people help uncover promising stocks. The system, which is still in beta testing, asks investors to rate stocks either "outperform" or "underperform." In turn, each investor is rated, as is each stock.
The end result? While only huge or exciting companies such as Sun Microsystems (NASDAQ:SUNW) and Disney (NYSE:DIS) have more than 20 or so analysts following them, CAPS harnesses the ideas of thousands to provide the long tail of the stock market with the same depth of coverage.
Drumroll
, please ...
So without further ado, here are five five-star CAPS stocks that four or fewer professional analysts are covering.
|
Company |
Mkt. Cap* |
CAPS Users |
Analysts |
Analyst Consen- sus |
|---|---|---|---|---|
|
AAR (NYSE:AIR) |
$937 |
19 |
4 |
Buy |
|
Cherokee (NASDAQ:CHKE) |
$377 |
35 |
2 |
Strong Buy |
|
PICO Holdings (NASDAQ:PICO) |
$514 |
11 |
1 |
Buy |
|
Premier Exhibitions (NASDAQ:PRXI) |
$169 |
30 |
0 |
N/A |
|
Spartan Motors (NASDAQ:SPAR) |
$310 |
32 |
4 |
Buy |
*In millions.
As always, these stocks are offered not as formal recommendations, but rather as ideas worth researching further. That said, if you're interested, Premier Exhibitions seems like an interesting little company. Besides being in the bizarre business of taking exhibitions of Titanic artifacts and preserved human bodies on tours around the world, it boasts substantial insider ownership and solid financials. The stock is intriguing, to say the least.
Want to learn more about these or any other undercovered small caps? Start by reading through what other investors have to say about them in CAPS. Just click here to join the free beta test today.
Tim Hanson does not own shares of any company mentioned. Disney is a Stock Advisor recommendation. The Fool's disclosure policy pities the fool who doesn't have adisclosure policyof his own.
