Think of investor sentiment as a pendulum that swings in tandem with a company's share price. When investors begin to think highly of your 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 130,000-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. So let's look at companies previously rated one or two stars that recently enjoyed a bump in investor confidence to see whether the stars are aligning in their favor.
|
Company
|
CAPS Rating (out of 5 max)
|
Recent Price
|
Next-Year EPS Growth
Estimate
|
|
Cenveo (NYSE: CVO )
|
***
|
$4.87
|
50%
|
|
Hospitality Properties Trust (NYSE: HPT )
|
***
|
$11.97
|
(4%)
|
|
Ligand Pharmaceuticals (Nasdaq: LGND )
|
***
|
$3.00
|
23%
|
|
PIMCO Corporate Opportunity Fund (NYSE: PTY )
|
****
|
$8.98
|
NA
|
|
Progenics Pharmaceuticals (Nasdaq: PGNX )
|
***
|
$5.71
|
12%
|
Source: Motley Fool CAPS.
Obviously, this is not a list of stocks to buy -- just a starting point for further research. Yet if some investors are taking notice of these stocks, maybe we should, too.
The sun's always shining somewhere
Ligand Pharmaceuticals has gotten a boost from a number of positive developments from its therapies. Its partner Pfizer (NYSE: PFE ) received European approval for the osteoporosis treatment Fablyn, earning Ligand a $3 million milestone payment, and an alliance with GlaxoSmithKline (NYSE: GSK ) earned Ligand half a million dollars after it identified something that could lead to a new drug being developed. It has earned more than $18 million in milestone payments thus far because of its collaboration with Glaxo.
Such achievements continue to attract investors like CAPS All-Star zzlangerhans, who follows drug stocks and notes Ligand's strong cash position.
I've been looking for a bigger pullback in Ligand given weak knees in the past but I'm getting tired of standing on the sidelines as the company continues to progress its pipeline. Mixed news on Fablyn since my last pitch-a Complete Response from the FDA but [European] approval. I was expecting negative news from the FDA which is part of the reason I kept my green thumb off the stock in recent weeks. They should start booking Promacta royalty revenue within the next quarter or two. … Despite positive developments the share price remains well below year-ago levels. A strong cash position gives the company time to prove they can book revenues and continue to make deals with large pharma on late stage pipeline candidates.
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. Since it's free to sign up and post your thoughts, why not use this opportunity to take your star turn?
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