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 up 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 that sentiment to help determine the best time to invest. Let's look at previously rated one- or two-star companies that have recently enjoyed a bump in investor confidence and see whether the stars are really aligning in their favor.
|
Company
|
CAPS Rating (out of 5 max)
|
Recent Price
|
Next-Year EPS Growth
Estimate
|
|
Cray (Nasdaq: CRAY )
|
***
|
$4.10
|
NA
|
|
Delta Petroleum (Nasdaq: DPTR )
|
***
|
$1.71
|
NA
|
|
Goldcorp (NYSE: GG )
|
***
|
$36.98
|
23%
|
|
Luminex (Nasdaq: LMNX )
|
***
|
$15.51
|
82%
|
|
Rambus (Nasdaq: RMBS )
|
***
|
$12.10
|
NA
|
Source: Motley Fool CAPS.
Obviously, this is not a list of stocks to buy -- just a starting point for further research. Yet if some CAPS members are taking notice of these stocks, maybe we should, too.
The sun's always shining somewhere
Worldwide financial troubles and weak currencies only help add fuel to the fire of those who want an international gold standard. Certainly, it has led China to push for something other than the dollar to be the world's reserve currency.
If all the problems confronting it don't mean the dollar is doomed, that doesn't mean the case for investing in gold isn't as strong as it ever was. CAPS member rlouden says that the time to buy gold -- and gold producers like Goldcorp -- is now.
Current fed monetary policy will result in inflation down the road. Gold does well in inflationary environments and now is the time to invest in advance of that. Also, worldwide there are no currencies to buy, so the currency of choice will be gold.
Earnings at Goldcorp jumped in the first quarter as production rose 18%, similar to what happened at Yamana Gold (NYSE: AUY ) , where earnings rose 33% year over year. Even with share prices up around 40% for the month for both stocks, look for prices to continue going up.
Ramblin' Rambus
DRAM maker Rambus has generated a lot of ire for the industry patents it holds, and while some investors like onepremise have long chafed at its profound power, really, why shouldn't the company protect its intellectual property?
Rambus, like PCI and PCI-SIG, is an [intellectual property] holder/owner and apparently not a very good one. In many ways, their sole purpose is to enforce their standards and defend their patents. I would almost consider it more a law firm than a team of engineers. It's nice having standards and in some cases justified. However, sometimes those enforcing standards can become a little too greedy and abusive to manufacturers. I'm not sure I would necessarily call it patent trolling, but they are definitely claiming damages on DDR-SDRAM and related memory controller patents in a very aggressive manor. Companies are not going to want to work with them out of fear of being sued. I would be less excited about owning stock in Rambus.
While the Federal Trade Commission originally ruled against the memory maker, saying it violated antitrust laws by hiding its intellectual property from industry members like Micron Technology (NYSE: MU ) when the computer industry was establishing standards, the commission dismissed the charges against Rambus after an appeals court overturned the decision and sent it back for reconsideration.
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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