Using the Fool's new investment community, Motley Fool CAPS, I've been surveying stocks that have surprised the community by defying their rating over a 30-day period. Earlier in the week, I offered up a group of former one-star stocks that have gone sharply north in the last month. Today, I've got seven former five-star stocks have taken a bit of a dip. Sure, it's bad news for anyone who already owned these stocks, but for bargain hunters, it may be a good chance to pick up some stocks on sale.

Here are the stinky seven for the week, as identified by your fellow Fools on CAPS. Each of the companies below had been given a five-star rating (the highest) by our community of investors just 30 days ago:


30-day return

One-year return

United Retail Group (NASDAQ:URGI)



Coldwater Creek (NASDAQ:CWTR)






Arena Pharmaceuticals (NASDAQ:ARNA)



Enerplus Resources Fund (NYSE:ERF)



Penn West Energy Trust (NYSE:PWE)



Mobile Mini (NASDAQ:MINI)



Data provided from Motley Fool CAPS as of Nov. 30.

Only two of these stocks were able to hang on to their five-star status through their disappointing performance: Penn West and Mobile Mini. The others didn't fare quite so well, with Arena and Enerplus dropping a notch to four stars, United Retail and Coldwater sinking to three stars, and TELUS getting knocked all the way down to one star.

The underlying story of about half of the companies in the group is the income trust corporate structure. On the U.S. markets, most investors are familiar with this structure through real estate investment trusts (REITs) such as Simon Property Group and Host Hotels, and royalty trusts like BP Prudhoe Bay and San Juan Basin Royalty Trust. The income trust structure requires that most or all of the return on the underlying assets be returned to unitholders. This allows the trust to reduce or eliminate taxes at the corporate level, thus avoiding the nasty double taxation typical of dividends.

For a while in the U.S., a third type of income trust existed, with an operating business as its underlying asset. The government got a bit fussy over the amount of tax revenue it was losing as businesses converted to this structure, though. In 1987, Congress passed legislation that made these partnerships taxable as normal corporations.

Flash forward to Oct. 31, 2006, when Canada's finance minister, Jim Flaherty, announced a new tax on dividends that Canadian trusts pay out, making their tax structure more similar to corporations. Enter the pain. The Toronto Stock Exchange fell hard on the news, as did the shares of income trusts all over the country. Among them, Enerplus Resources and Penn West saw one-day declines of 14.8% and 15%, respectively. But with 118 outperform ratings versus just three underperform ratings, CAPS members are coming out in droves to support Penn West, despite the ruling. With Penn West trading at an 8.5 trailing price-to-earnings ratio and offering nearly 12% in dividends, I can hardly blame them.

Canada's telephone giants, TELUS and Bell Canada (a lowly one-star on CAPS) aren't income trusts, but they also saw shares dive on the decision. Both companies had announced their intentions earlier this fall to convert to the income trust structure. Though a number of CAPS players have given Bell Canada the thumbs-up to try to capture a bounce off the recent drop, five new underperform ratings on TELUS in the last month tell me that the community thinks little of the near- or long-term prospects for that stock.

Outside of Canada, Mobile Mini -- which does not, in fact, have anything to do with cell phones -- has seen a somewhat mysterious drop in its stock over the past month. The company provides portable storage units to more than 80,000 customers in a wide range of businesses, from retail to construction to the U.S. military. After beating analysts' expectations with strong results for their third quarter on Oct. 31, the stock has been on a pretty steady slide from $32.17 down to $27.50, where it closed yesterday.

It could be that investors are getting nervous about weakness in the homebuilding sector and the recent struggles of Wal-Mart. It's likely, though, that these fears are unfounded, since Mini's big construction exposure is on the non-residential side (35% of leases in 2005) and Wal-Mart hasn't been a 5% customer since back in 2002. CAPS members seem to agree -- there have been six new outperform ratings on the stock since the end of October, including one from one of the top Wall Street firms followed on CAPS, Needham Securities.

Time to go out and start buying? Maybe not, but Penn West, Mobile Mini, and Enerplus, if not some of these other five-star underachievers, might be excellent candidates for further due diligence. In the meantime, get in the game and get yourself heard. Join the other 14,500-plus investors who have already become a part of the greatest investor community out there -- Motley Fool CAPS.

For more CAPS coverage:

Fool contributor Matt Koppenheffer thinks that investors of all sizes, shapes, colors, ages, geographies, levels of experience, and musical tastes can benefit from and contribute to CAPS . He does not own shares of any of the companies mentioned. Wal-Mart is a Motley Fool Inside Value pick. The Fool's disclosure policy is always a solid five stars.