Surprises are part of the game when it comes to picking stocks. Sometimes this can mean bad news -- say, one of your top stocks revealing that its management has been backdating options.Other times, though, the market gets caught off-guard by positive surprises from stocks that most investors thought were down for the count. In this situation, investors who stood by the stock often break into a chorus of "I told you so," as short sellers are forced to figure out just how much pain they can take.
To dig up some of these unloved, naysayer-defying stocks, I'm turning once again to The Motley Fool's CAPS community. Each of the companies below had received a one-star rating (the lowest) from our community of investors just 30 days ago:
Data provided from Motley Fool CAPS as of May 16.
It's important to remember that some of these stocks, particularly the smaller, more volatile ones, could just as easily reverse these big gains over the next 30 days. In some cases, though, the strength could be a sign that the company's prospects have changed for the better, or that it had been beaten down just a little too far.
Are these stocks better than CAPS players had thought, or are they just singing that proverbial swan song? The best way to get a feel for where these guys are headed is to dig in and do some research. I thought I'd kick you off with some thoughts on Pre-Paid Legal Services.
A pre-paid pop
Since Pre-Paid Legal Services is making its second appearance on this list in 2007, I couldn't help taking a closer look at it. It previously showed up the critics in late March, when it jumped 26% in the course of a month. It's since added 23 percentage points to that gain, up an impressive 85% in the last year.
(...Pre-Paid Legal is a pretty straightforward idea. In exchange for a monthly premium of around $26, members are entitled to legal services though Pre-Paid Legal's network of law firms. Mind you, Pre-Paid doesn't include remedies for an exhaustive list of potential legal snafus, but it does cover many of the most common occasions where a lawyer might help....)
