5 Cold Stocks Heating Up

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 sentiment to help determine the best time to invest. So let's look at companies that recently earned a confidence boost from investors after having been rated one or two stars and see whether that added confidence is warranted.

Company

CAPS Rating (out of 5 max)

Recent Price

Next-Year EPS Growth

Estimate

Duke Realty (NYSE: DRE  )

***

$9.30

(20%)

Gentex Group (Nasdaq: GNTX  )

****

$12.37

68%

Great Wolf Resorts (Nasdaq: WOLF  )

***

$3.29

(32%)

HQ Sustainable Maritime Industries (NYSE: HQS  )

***

$9.02

38%

Micrus Endovascular (Nasdaq: MEND  )

***

$6.44

97%

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
More than 179 million kilograms of tilapia were imported into the U.S. last year, a 3% increase over the year before. Despite those numbers, not many people are familiar with the freshwater fish that has grown in popularity, particularly in restaurants and fast-food eateries looking to increase the diversity of whitefish items on their menus. Even Long John Silver's now offers grilled tilapia alongside its regular deep-fried fare.

That's good news for HQ Sustainable Maritime, which primarily purchases and processes the farm-bred fish in China. The U.S. and Canada remain the largest markets for tilapia, and China is the largest producer of the fish, but volumes tumbled in the first two months of the year because an exceptionally cold winter overseas wiped out whole regions of production. Tilapia is the one of the most cultivated fish in the world, second only to carp.

The fish's popularity and the large fish kill have teamed up to raise prices. Tilapia, which competes against other healthy, low-fat meats like chicken, has even been called the "aquatic chicken." The fishery portion of HQ Sustainable Maritime's business might pit it against the likes of Tyson Foods (NYSE: TSN  ) for the hearts, minds, and stomachs of consumers. But the nutraceutical business, where it produces shark liver oil, shark cartilage, and bio- and health-care items made from tilapia, accounts for fully one-third of the company's revenue. That might put it more on the same footing with traditional Chinese medicine producer American Oriental Bioengineering (Nasdaq: AOB  ) .

Investors are intrigued with the potential of the fish farmer. CAPS member KempInTheWoods says the company has done an impressive job of combining importing the fish with a green-tinged aquaculture business in China.

Feed me, Seymour! These folks - based in Seattle - have done an impressive job of building up fish and shrimp farms - with a "green" edge. Doing the aquaculture in China and importing the product into N. America. Lots of things could go wrong - but I come down on the "buy" side.

Shine your starlight
So are these stocks driving ahead or ready to crash? It pays to start your research at 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. Because it's free to sign up and post your thoughts, why not use this opportunity to take your star turn?

American Oriental Bioengineering is both a Motley Fool Global Gains selection and a Motley Fool Hidden Gems pick. The Fool owns shares of American Oriental Bioengineering. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 24, 2009, at 4:01 PM, sisula wrote:

    You, fools, can pump AOB as much as you want, but you can't change the fact that this stock is a túrd.

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