Think of investor sentiment as a pendulum that swings in tandem with a company's share price. When investors begin to think highly of a company, its stock might also start heading in the right direction. Alas, you can rarely tell when investors are warming to a stock until after it has made that upward swing.
An astrolabe for investors
But Motley Fool CAPS' proprietary ratings, aggregated from the opinions and accuracy of 115,000-plus members, offer a great way to monitor investor sentiment. Like astronomers scanning the skies, investors can follow a stock's stars through its CAPS rating trend, tracking investor sentiment to help determine the best time to invest. Data suggests that CAPS' highest-rated stocks performed best while the lowest-rated did worst, so let's look at companies that were rated one or two stars but have recently enjoyed a bump in investor confidence to see whether the stars really are aligning in their favor.
|
Company |
Recent Price |
Next-Year EPS Growth Estimate |
|
|---|---|---|---|
|
Callidus Software |
***** |
$3.41 |
113% |
|
Google |
*** |
$371.21 |
21% |
|
JPMorgan Chase |
*** |
$44.00 |
98% |
|
3Com |
*** |
$2.35 |
3% |
|
BCE |
*** |
$31.00 |
6% |
Source: Motley Fool CAPS, Yahoo! Finance.
Obviously, this is not a list of stocks to buy -- just a starting point for further research. Yet if some of the best investing minds are taking notice of these stocks, maybe we should, too.
The sun's always shining somewhere
Although not everyone is enamored of the various offerings from Google -- CAPS member Robert685 said he thinks both Android and Chrome have failed to live up to expectations -- other investors believe that so long as it remains atop the search engine pile, the rest is gravy. The deal with Yahoo!
CAPS member Polarimetric writes that even in a recession, businesses still need to advertise -- and Google and AdSense make it cost-effective.
Google may be a tech stock, but it might as well be considered a consumer staple. No matter how far down the markets turn, people won't stop using Google. Internet advertising is an important player looking forward and AdSense is clearly the best platform. Why pay thousands to advertise on a couple sites when you can pay potentially less to advertise on thousands of sites? As small businesses look to cut costs and new businesses start on the Internet, they will turn to AdSense for their promotion needs.
The downturn in the economy has turned up one seemingly irrefutable fact: JPMorgan Chase CEO Jamie Dimon knows how to drive a hard bargain. He has been like a tyrant feasting at a meal. While Goldman Sachs
When all the dust settles, JPM is going to be a mammoth company. CEO is a smart guy picking up assets for pennies on the dollar. Short term will probably be a little volatile, but long term, this company's stock should be MUCH higher.
Shine your starlight
So are these stocks driving ahead, or ready to crash? It pays to start your research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Then weigh in with your own thoughts on which stocks you think are shooting stars or supernovas. It's free to sign up and post your thoughts, so why not use this opportunity to take your star turn?
