The CAPS Screen: 5 Stocks Wall Street Is Missing

By Ilan Moscovitz:

One of the best ways to profit in the stock market is to look where others don't. Wall Street's convenient inattention to a slew of promising companies is an opportunity to make big winners out of small investors.

Keeping in mind stocks the market missed for years, like Hansen Natural (Nasdaq: HANS) (which is up 19,449% from 1998 through 2007), I used our new CAPS screening tool to discover several promising companies Wall Street may be overlooking. Below are five companies with no more than three CAPS-rated analysts making a call on the stock.

They also have:

• Market caps between $250 million and $2 billion.
• At least 300 total calls from our entire CAPS community.
• Five-star ratings, the highest possible, from our CAPS members.

Remember, in the first year for which we have data, five-star companies outperformed with an average gain of nearly 28%.

Data from Motley Fool CAPS and Yahoo! Finance as of May 30.

Of course, screens are only a first step in the stock selection process. True Fools use due diligence because they know that not every underfollowed company will necessarily become one of the market's 10 best stocks.

Come and join us on Motley Fool CAPS to let the collective wisdom of our 105,000-person-strong CAPS community help you make your investment decisions. Check it out -- it’s free and fun to participate.

Copyright © 2008 Universal Press Syndicate.