This article is part of our Rising Star Portfolios series.

Most investors don't keep tabs on their companies' fundamental value. That's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early. Better yet, you'll improve your odds of finding the underappreciated home run stocks that provide the market's best returns.

We can help you keep tabs on your companies with MyWatchlist.com, our free, personalized stock tracking service. Here are three stocks from my watchlist that have been hot lately.

1. RAIT Financial (NYSE: RAS)
Each week, I cull a top stock idea from the pitches made on CAPS, The Motley Fool's free community of 170,000 members. RAIT Financial, a pick from last month, caught my eye because it has risen 40% from when it was picked. Shares of RAIT Financial, along with other commercial real estate investment trusts such as NorthStar Realty Finance (NYSE: NRF) and iStar Financial (NYSE: SFI), have risen more than 10% over the past month, along with the rest of the sector.

To see the pitch selected for CAPS' Weekly Top Stock Idea, click here. If you want to follow my weekly picks, you can subscribe to the series' RSS feed or follow on Twitter: @CAPSTopStocks

2. ATP Oil & Gas (Nasdaq: ATPG)
ATP Oil & Gas caught my eye after it had risen 10% in the past month before falling on Friday. The company's story is fairly well known. Last year, ATP Oil & Gas was expected to drill four wells that would transform the company into a cash flow machine. ATP Oil & Gas finished one well early in the year, but then the disaster in the Gulf of Mexico with Transocean's (NYSE: RIG) Deepwater Horizon happened, and all drilling ceased. Drilling has since resumed. Interestingly, last week the company changed the compensation package for its CEO to include a payment of three times salary, should the company be acquired. This is a huge incentive for management to get the company acquired, which could be great for shareholders because the company is undervalued.

3. Arena Pharmaceuticals (Nasdaq: ARNA)
Arena Pharmaceuticals caught my eye after rallying nearly 40% over the past month. Arena's shares plummeted in September after a Food and Drug Administration advisory committee recommended against approving the company's obesity drug, lorcaserin. Arena hopes to resubmit its new-drug application by the end of 2011. Vivus (Nasdaq: VVUS) is also resubmitting one for its obesity drug, Qnexa. Investors seem to believe that sellers in September overreacted, but the question is at what level is the risk-reward not worth it? In the meantime, for those looking for a high-risk, high-reward stock, Arena is a great play. Obesity is a large problem in the U.S., with Americans' waistbands widening every year. If an effective weight-loss drug can be found, the company that makes it would surely reap the rewards.

My Foolish bottom line
If you're looking for more information on these companies, keep checking in on my Rising Star portfolio in the coming weeks as I look further into each of them. If you're looking for more ideas, check out this video on a huge trend in 2011 and three stocks that should be on your list to profit from it.

This article is part of our Rising Star Portfolios series, where we give some of our most promising stock analysts cold, hard cash to manage on the Fool's behalf. We'd like you to track our performance and benefit from these real-money, real-time free stock picks. Click here to see all of our Rising Star analysts (and their portfolios).

Dan Dzombak's musings and articles he finds interesting can be found on his Twitter account: @DanDzombak. He owns shares of ATP Oil & Gas.

The Fool owns shares of Transocean. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.