These Cold Stocks Are Heating Up

When a stock's share price is lower than a North Dakota thermometer in February, investors tend to give it the cold shoulder. But as the market warms to a stock's prospects, its price can heat up in a hurry. Alas, you can rarely tell that a stock is melting investors' hearts until after it's made that upward leap.

Taking the market's temperature
But Motley Fool CAPS' proprietary ratings, aggregated from the opinions and accuracy of 170,000-plus members, offer a great way to monitor investor sentiment. Following a CAPS rating trend can help us 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 they're truly heating up -- or headed back to the deep freeze.

Source: Motley Fool CAPS.

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. 

Caution: Contents may be hot
A few months ago, there was some concern that Intel's (Nasdaq: INTC) warning about softer PC sales might cause tech to sputter, but renewed strength in the space has the sector on a tear. Over the past month, the CAPS Semiconductor and Semiconductor Equipment sector is up almost 10% compared to just a 5% increase in the S&P 500.

Yet semiconductor substrate producer AXT has done even better, rising more than 20% over the past 30 days, taking advantage of the current tech boom and the resulting increased demand for its materials. Sales were up 60% while profits doubled as smartphones and other "intelligent wireless devices" drove growth. One of those intelligent devices would be the iPad, which is helping push margins at TriQuint Semiconductor (Nasdaq: TQNT) higher too, though AXT outpaces it, and much of the rest of the industry the further down the income statement you go.

That's not lost on the CAPS community, which has 95% of the 355 members rating the semiconductor maker expecting it to turn in additional market-beating returns. SharePlanner simply calls it one stock that only goes up. Let us know on the AXT CAPS page whether investors need to look out below or should keep their eyes on the heavens.

A clear road ahead
Sex sells, or at least BioSante Pharmaceuticals hopes it does. Its development of a so-called "female Viagra" is supposedly safer than Procter & Gamble's (NYSE: PG) testosterone patch that was shot down by the FDA several years ago or Boehringer Ingelheim's flibanserin, which would have needed much more study to validate its safety and efficacy and was subsequently dropped. LibiGel is a topical testosterone cream that could end up having the market all to itself if ultimately approved.

Considering the results of its rivals, there's little wonder why the market is a bit skeptical about whether the FDA will approve the gel, but with the treatment in late-stage trials investors may have a reason to party without the lights on.

Although the CAPS community remains hopeful about BioSante's prospects -- 89% rate it to outperform the market -- only you can decide whether the biotech is right for your portfolio, so add it your My Watchlist page and have all the Foolish news and analysis about this stock aggregated in one place.

Golden globes
Oil and gas producer Magnum Hunter Resources got a nice boost from an analyst upgrade last month as the first of three wells in its Eagle Ford Shale play and two more in the Marcellus region came online to boost production.

This could be the next big area to see explosive growth, and Chinese oil giant CNOOC recently snatched up one-third of Chesapeake Energy's (NYSE: CHK) in the area in a bid to ensure that country has access to plenty of energy resources. pchop123 sees Magnum's massive gains this year -- it's tripled in value so far -- as only just beginning: "Terrific run this year so far, but with this stocks resources, it should continue to outperform."

Head over to the Magnum Hunter Resources CAPS page and let us know if you think this will be a company to strike it rich in shale.

Checking the mercury
Are these stocks invitingly warm or bitterly frosty? 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 hot little numbers, and which offer cold comfort. It's free to sign up.