People watch stocks for different reasons -- they're waiting for a dip in price, watching for a specific catalyst, gathering all the news and information that might affect stocks they already own, or considering a sell. Regardless of their motivation, we can better understand market sentiment by seeing who's watching what. With the Fool's free My Watchlist service, we have tens of thousands of people telling us the businesses that have, for whatever reason, piqued their interest.

With this data we have come up with a new metric -- watch interest -- to inform investors what stocks their peers keep tabs on in each industry. In the case of the private equity industry, watch interest denotes the percentage of people keeping an eye on private equity stocks in general and who are also specifically watching each individual company. By looking at what industry stocks people are most interested in, you can get ahead of the curve by finding hot stocks that you might have otherwise overlooked. The industry is very diverse and while some firms are still trying to recover from the debt crisis, others powered through it and are doing very well today.

The most-watched private equity stock is...
Looking at the aggregate data, we see that watch interest in Harris & Harris (Nasdaq: TINY) is above the rest of the industry, and for good reason. As CAPS player zemko100 wrote in April:

Venture capital group well positioned in a number of companies primarily involved with some aspect of nanotechnology. Very smart guys leading this parade. Sector diversification by people with real skin in the game.

Here are the rest of the watch interest percentages for the top 15 most-watched companies in the industry, along with the stocks' CAPS ratings to show the sentiment of our investing community:

 

Company

Market Cap (millions)

CAPS Rating (out of 5)

Watch Interest

1

Harris & Harris (Nasdaq: TINY)

$169

*****

16.1%

2

American Capital (Nasdaq: ACAS)

$3,562

****

14.3%

3

Prospect Capital (Nasdaq: PSEC)

$1,093

****

10.8%

4

Ares Capital (Nasdaq: ARCC)

$3,303

****

10.3%

5

BlackRock Kelso Capital (Nasdaq: BKCC)

$687

***

9.7%

6

Apollo Investment (Nasdaq: AINV)

$2,065

*****

8.5%

7

TICC Capital (Nasdaq: TICC)

$321

*****

4.9%

8

AllianceBernstein (NYSE: AB)

$2,104

****

3.8%

9

PennantPark Investment (Nasdaq: PNNT)

$517

*****

3.3%

10

Solar Capital (Nasdaq: SLRC)

$913

**

3.0%

11

MCG Capital (Nasdaq: MCGC)

$481

***

2.0%

12

Gladstone Capital (Nasdaq: GLAD)

$201

*****

1.4%

13

Gladstone Investment (Nasdaq: GAIN)

$164

*****

1.4%

14

Kohlberg Capital (Nasdaq: KCAP)

$187

****

1.2%

15

MVC Capital (NYSE: MVC)

$323

*****

1.2%

Source: Motley Fool, Motley Fool CAPS.

Whether you're keeping an eye on industry stalwarts like American Capital, or are watching an up-and-comer like Ares Capital, it pays to watch. We can help you keep tabs on your companies with My Watchlist, our free, personalized stock tracking service. Click here to start now.