The goal of this column is to help you learn more about promising small companies that very few -- if any -- professional investors are following. Why do we this? Because:

  1. Underfollowed small-cap stocks offer incredible rewards.
  2. 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 Boston Scientific (NYSE:BSX) 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.

Drum roll, 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

Actuate (NASDAQ:ACTU)

$340

32

3

Buy

Delta Apparel (AMEX:DLA)

$158

13

2

Buy

Exlservice Holdings (NASDAQ:EXLS)

$802

13

0

N/A

Layne Christensen (NASDAQ:LAYN)

$458

12

2

Buy

Silverleaf Resorts (AMEX:SVL)

$158

22

1

Buy
Analyst data from Thomson One.
*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, Silverleaf Resorts seems like an interesting little company. The timeshare operator is more than 25% insider-owned and looks cheap by several metrics. However, a quick Internet search reveals some customer complaints and testimonials from dissatisfied former employees.

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. The Fool's disclosure policy pities the fool who doesn't have a disclosure policy of his own.