Hot Stocks You're Buying Now

One of the great advantages of Motley Fool CAPS, our free community intelligence database, is that it offers a luminescent picture of what's hot in the stock market. Today -- and if the response is strong enough -- each week, I'll take a look at the three best-performing industries and your favorite long and short candidates.

But first, allow me to briefly introduce you to CAPS. It's a unique system whereby each investor rates at least seven stocks versus the S&P 500 as either an outperform or an underperform. Community sentiment is then calculated to produce star ratings for each stock -- five stars being the highest and one being the lowest. All-star stock pickers, whose choices have performed better than 80% of the community, more heavily influence the ratings.

CAPS is also organized into common "tags" for industries. The database tracks the best performing sectors over the last business day, 30 days, and year. We'll use 30-day returns because our aim here is to identify the hottest stocks right now.

Now, with that preamble behind us, CAPS says the best three industries are:

  • Satellite, which includes satellite radio. Stocks in this sector have advanced an average of 29.9% over the past 30 days.
  • Optical components, which includes firms specializing in equipment used for the high-speed delivery of data. Stocks in this sector have advanced an average of 19.2% over the past 30 days.
  • Music and/or video stores, which includes both old-school retailers such as Blockbuster (NYSE: BBI  ) and new-school rebels such as Netflix (Nasdaq: NFLX  ) . Stocks in this sector have advanced an average of 18.3% over the last 30 days.

According to you, our Foolish readers, the best stocks in these industries to own now (i.e., those with three or more stars in CAPS) are:

Company

CAPS star rating

No. of CAPS ratings

Bullish CAPS ratings

Bull ratio

Finisar (Nasdaq: FNSR  )

4

116

110

94.8%

Netflix

3

1,898

1,654

87.1%



Source: Motley Fool CAPS

And your favorite short candidates (i.e., those rated one or two stars in CAPS) are:

Company

CAPS star rating

No. of CAPS ratings

Bearish CAPS ratings

Bear ratio

Worldspace (Nasdaq: WRSP  )

1

117

107

91.4%

Blockbuster

1

283

199

70.3%

XM Satellite (Nasdaq: XMSR  )

1

525

241

45.9%



Source: Motley Fool CAPS

Do you agree? Disagree? Let us know what you think by signing up for CAPS today. It's 100% free to participate.

Cap off your day with related CAPS Foolishness:

Netflixis a Motley Fool Stock Advisor selection. Ask for us an all-access pass and you'll get a backstage look at all of the stocks that are helping David and Tom Gardner beat the S&P 500 by more than 44 percentage points as of this writing. It's free for 30 days. All you have to lose is the prospect of a richer portfolio.

Fool contributor Tim Beyers, ranked 1,296 out of 14,230 in Motley Fool CAPS, didn't own shares in any of the companies mentioned in this story at the time of publication. Get the skinny on all the stocks he owns by checking Tim's Fool profile. XM is a former Rule Breakers selection. The Motley Fool's disclosure policy is hotter than city asphalt in the summer heat.


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