The 5-Star Retailers

My grandmother told me to learn something new every day.

Well, I certainly learned something today. I discovered that the highest-ranked retailers in Motley Fool CAPS, our community-intelligence wonder tool, are not what I expected. And you know what? That means CAPS is doing its job of presenting new ideas to consider -- especially when a couple of them look to be good bargains. Go, CAPS!

The list
What are the five-star retailers in CAPS? I'm glad you asked. (Five stars, by the way, represents the highest possible CAPS ranking.) It's time to fill you in and give a shout out to the scoring leaders for each retailer.

A big one
For those who might not be familiar with Tesco -- after all, it has only 12 ratings so far in CAPS -- it's an international grocery-store chain based in England that has been moving heavily into non-food sales. Today, it's likened to Wal-Mart (NYSE:WMT) superstores, and I think TMFPhila sums the company up well:

This company is a beast and it's rolling its way into the US markets to take on WMT and TGT [Target].

The United States is indeed the destination for Tesco's latest invasion. But Tesco is not just a two-country player. It's taking on Wal-Mart and its contemporaries around the world!

A small one
United Retail Group is a small-cap retailer of women's fashions that does business under the names Avenue, Avenue Body, and Cloudwalkers. I admit that I've been never been to one of its stores, and frankly, I don't think I've ever even seen one. But that and 25 cents might get you a gumball. And anyway, with a summary like this from pencils2, maybe I should find the stores near me and check them out:

With the good foundation of stores and online retail, expanding SSS [same-store sales], business producing strong cash flow, the strengthening balance sheet that's already healthy, experienced management, and low P/E multiple, URGI is one that I think is worth watching here on out.

Those are the kinds of words that make a value investor tingle with delight. I'm off to punch my ZIP code into the store locator.

A bottom-dweller
Group 1 is an automotive retailer selling new and used cars as well as maintenance and repair services. The irony here is that one of the three CAPS bears on this company is actually the scoring leader. Talk about going against the crowd and winning!

With the stock near its 52-week low and all of those investors thinking it will outperform, what could be in store for the future? I don't know, but a declining stock price is about the only thing a bargain hunter needs to get the research process started.

An up-and-comer?
I've written about Conn's before. But it's not about me here. It's about CAPS. In that spirit, here's what Patrick6K had to say about the electronics retailer you've probably never heard of:

When you think of electronics, the first players that seem to roll off of everyone's tongue are Best Buy (NYSE:BBY) and Circuit City (NYSE:CC).

One you don't hear nearly as often, but should, is Conn's. I love this company, not just from an investing standpoint, but also from a customer's point of view. I've bought appliances and the like from Best Buy and Circuit City and then I've bought them from Conn's. It's like a whole different world. Their sales staff brings new meaning to knowledgeable. They also have an in-house credit program that is unmatched.

This is another one with a stock price close to its 52-week low. How do the words "five-star bargain" sound? I agree -- pretty good.

The Foolish bottom line
If you ain't learning, you're falling behind. And learning is just one of the benefits of CAPS. You also have the opportunity to experiment and test new ideas, to challenge the ideas of others, and, most importantly, to be a part of Foolish history that could revolutionize the way we all think about investing. Sign up for CAPS today. It's free to participate!

For more on these five-star retailers, check out:         

• Quick Take: Tesco's Japan Expansion Plans
• The Ride With Group 1 Automotive: Fool by Numbers
• Conn's Blown Over

Wal-Mart is a Motley Fool Inside Value recommendation. Best Buy is a Motley Fool Stock Advisor selection. Both newsletters are available for a free 30-day trial.

Retail editor and Inside Value team member David Meier loves a good bargain and is ranked 1,241 out of 27,896 participants in CAPS. He does not own shares of any of the companies mentioned. You can view his TMF profile here. The Fool takes its disclosure policy very seriously.