Worldwide, IBM (NYSE:IBM) employs nearly 400,000 people. But even that huge sum is dwarfed by its shareholders of record. At the end of 2008, more than 564,244 people held IBM shares, according to the company, earning the computing and services giant a spot on CNNMoney's list of the 18 most widely held stocks. All that investor love may be great news for Big Blue, but it might become a big disappointment for your portfolio.

With hundreds of thousands of investors owning their shares, you might reasonably expect all the companies on CNNMoney's list to be impressive stocks that are well worth buying. But in some cases, their rankings from Motley Fool CAPS community and their recent performance tell a different story:

Company

CAPS stars (out of 5)

5-Year Average
Annual Return

10-Year Average
Annual Return

P/E

IBM

***

7.6%

2.7%

13

Wal-Mart (NYSE:WMT)

***

2.2%

(0.8%)

15

AT&T (NYSE:T)

****

6.5%

(1.9%)

14

Microsoft (NASDAQ:MSFT)

***

3.9%

(4.4%)

19

Home Depot (NYSE:HD)

***

(4.8%)

(6.4%)

22

ExxonMobil (NYSE:XOM)

****

8.7%

7.5%

16

Alcatel-Lucent (NYSE:ALU)

**

(25.3%)

(21.6%)

N/A

S&P 500

 

0.4%

(0.9%)

  

Data: Motley Fool CAPS, Morningstar.com, Yahoo! Finance.

In this grab-bag of a list, only ExxonMobil really has an impressive five- and 10-year record, with IBM enjoying slightly lesser gains. These companies aren't necessarily duds, but they might not be the best bargains right now. Given investors' high expectations for these popular businesses, you'll want to make sure that you buy into them only at a compelling price.

Remember, many stocks are widely held only because hundreds of thousands of people haven't gotten around to selling them yet. Alcatel-Lucent, for example, has been bringing the pain to many portfolios for years. Some of its lackluster shares may reside in the accounts of folks who got them as a gift from grandma, while other Alcatel-Lucent investors may have (mercifully?) forgotten that they own shares to begin with.

A little investing voyeurism never hurts -- it's admittedly fun to see what other people own. But popularity shouldn't be your key factor in choosing potential investments. The best stock performers rarely ranked among Wall Street's most popular when they started out. For better long-term returns, you'll want to start your search with companies that fewer people own.

Learn more about the value of defying the crowd: