Wall Street's Best Hidden Stocks
When asked for the secret of his success, baseball player Wee Willie Keeler replied, "Hit 'em where they ain't." What worked for Willie at the plate applies equally well in investing.
Seeking stocks that others ignore, shun, or simply forget gives individual investors like you an edge over the professionals. When Wall Street turns a blind eye, you have a chance to get in before these stocks get discovered -- or rediscovered -- and start taking off.
Below, we'll check out companies with only a handful of analyst coverage, then pair our list with the opinions of the Motley Fool CAPS community. A stock that garners CAPS's top ratings, but hasn't yet caught analysts' attention, could be your next home-run investment.
Wall St. Picks
Wall St. Bullish Sentiment
Est. EPS Growth Next Year
|FLY Leasing (NYS: FLY)||*****||4||75%||67%|
|Silvercorp Metals (NYS: SVM)||****||5||80%||29%|
Source: Yahoo! Finance; Motley Fool CAPS.
Remember, without much analyst support, you'll have to do your more scouting on your own to see whether these stocks deserve a spot on your portfolio's roster. Don't just buy or sell them based solely on their appearance here.
Hiding in plain sight
As the bankruptcy of American Airlines attests, the industry is still a tough place to make a buck, even as rivals like Delta Air Lines and United Continental do better as a result of AA's financial difficulty. Still, the industry recently turned to profitability and that's given Delta and US Airways (NYS: LCC) the wherewithal to consider bids for American and it signals a chance for aircraft-leasing outfits like FLY Leasing to recover from their own bits of turbulence.
Over the past three months both FLY and Aircastle have seen their shares rebound, though the latter has been performing better than its peer for much of the past year. But FLY has exhibited some strong fundamentals of its own and is generating significant cash flows, allowing growth. It recently expanded its fleet of planes to 109 aircraft, or by 80%, by purchasing 49 planes for $1.4 billion. It leases those out to 53 airlines in 29 countries, and they remain in demand. Last quarter, despite seeing earnings fall, FLY was able to maintain a 100% utilization rate.
That could be why all 76 CAPS All-Stars who weighed in on the leasing specialist believe it will outperform the broad market indexes. I just rated it to outperform as well, believing the new, expanded fleet will be accretive to earnings immediately and give the stock more room to grow.
Let us know in the comments section below or on the FLY Leasing CAPS page if you think investing in leasing companies is a better way to bet on the airline industry, then add it to your Watchlist to be notified when it gains altitude.
A shining example
One miner's loss can lead to investors finding gains elsewhere in places they may not have previously considered. Top silver miner Hecla Mining (NYS: HL) suffered a collapse in its share price last week after having its lead Lucky Friday mine shut down by regulatory overseers until 2013, when it expects to have debris cleared out from years of digging. That means investors who might have looked to Hecla as a good proxy to get silver exposure will now look to other up-and-coming miners like First Majestic Silver (NYS: AG) or Silvercorp Metals.
Although after accusations of shady financial maneuvers may cause trepidation amongst some would be Silvercorp investors, the miner has pushed back hard against the charges and is intent on showing greater transparency in its operations. It spent $1.5 million on an internal investigation into the allegations and found nothing amiss and now it's hired two well-known consulting firms to prepare an NI 43-101 report to lend more credibility to its mineral assessments.
CAPS member evanmacdonald believes it was the short sellers who committed fraud and finds Silvercorp positioned to drive higher on increased demand in China.
Low cost of production and easy access to increasing Chinese demand for silver makes them a no-brainer in the wake of a fraudulent short attack.
Dig into the miner's prospects on the Silvercorp Metals CAPS page and add it to the Fool's free portfolio tracker to see whether it can strike the mother lode.
Swing for the fences
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At the time this article was published Fool contributorRich Dupreyholds no position in any company mentioned.Click hereto see his holdings and a short bio. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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