Successful investing requires you to think independently and stick to your convictions. That's hard enough with stocks that are generally popular -- after all, in the stock market, there's a seller for every buyer. But it gets even tougher with stocks that can't seem to find good press or bullish investors anywhere. Of course, defying popular opinion has led many contrarian investors to great returns.
In that spirit, I've headed to Motley Fool CAPS to dig up some unloved stocks that have delivered big gains to shareholders over the past month. Our community of investors has put each of these companies on the bottom two rungs of the CAPS rating scale:
|
Stock |
30-Day Return |
One-Year Return |
Current CAPS Rating |
|---|---|---|---|
|
VIVUS (NASDAQ:VVUS) |
20.9% |
63.5% |
** |
|
Winn-Dixie Stores (NASDAQ:WINN) |
19.4% |
(36.5%) |
** |
|
Heelys (NASDAQ:HLYS) |
16.5% |
(82.3%) |
* |
|
Array BioPharma |
16% |
(48.1%) |
** |
|
Regeneron Pharmaceuticals (NASDAQ:REGN) |
13.7% |
(5%) |
* |
|
Midway Games (NYSE:MWY) |
10.2% |
(55%) |
* |
|
InterMune |
10% |
(38.4%) |
** |
Data provided by Motley Fool CAPS as of July 16.
Now, given CAPS' knack for accurately gauging winners and losers, I'm not recommending that you run out and buy these stocks! An index set up to short CAPS' least-liked stocks has outperformed more than 98% of all other CAPS players. That said, CAPS players have proved overly negative on some high-performing stocks. Are any of the stocks in the table above the same sort of unloved winners?
Fashion with wheels
When it comes to crazy shoes, those holey zapatos from Crocs (NASDAQ:CROX) seem to get all the attention. But let's not forget about Heelys, the company behind those sneakers-cum-roller skates that are all over the mall.
Heelys stock has gotten ravaged since its IPO back in December of 2006. The stock closed at $32.60 on that first day of trading; since then, it has collapsed to the tune of 85% as rapid sales growth turned into painful declines.
Whether or not a wheel in your shoe is your idea of fun, the stock could be worth a second look. Though sales are declining, the company is still profitable and cash flow-positive, and it's carrying more than $100 million of cash on its balance sheet against less than $8 million of total liabilities.
Some CAPS members even think there could be a light at the end of the tunnel. CAPS member calrose23 recently rated the stock an outperformer, saying:
These shoes are so annoying, but everywhere I go there are kids wearing them. They are introducing them in Europe and they are huge. They are also introducing shoes without wheels. This could be a big shoe company if they can capitalize on their current base.
A WINNing turnaround?
If you're looking for a more traditional business, then grocer Winn-Dixie may be more up your alley. The company has spent the past few years struggling to get out from under a heavy debt load and turn a profit, but it looks like it could be coming out the other side. The company has now managed to pay off all of its outstanding debt, and things are starting to look up on the bottom line.
Though a grocer like Winn-Dixie should be able to weather an economic downturn better than many consumer-facing businesses, this is no Wal-Mart (NYSE:WMT) -- which has been sucking up bushels of suddenly value-conscious consumers. Even so, it's expected to be able to wade against the economic tide of its Florida home market and maybe even pick up some ground following Publix's acquisition of Albertsons.
On CAPS, All-Star TMFMattyA is a fan of Winn-Dixie's stock and led his recent bullish pitch by saying, "If Winn-Dixie can just be an average grocer (even below-average), it could be an outstanding investment." He went on to conclude that the stock has "Limited downside, huge upside potential."
Make your call
So what's your take? Is there good reason to get more bullish on these stocks right now, or are their outperforming days numbered? Head over to CAPS and let the community of more than 110,000 Fools know what you think. While you're there, you can start your research on any of the other stocks listed above -- or any of the 5,500-plus stocks on CAPS.
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