Here at the Fool, we always encourage our readers to listen carefully to both sides of any stock story -- the bull case and the bear case. That way, investors have the very best chance to make informed and objective decisions.

That kind of philosophy inspired the creation of our Dueling Fools column and award-winning discussion boards. It's even started a few Foolish fights.

So with that in mind, I'm going to highlight two closely contested "investment debates" taking place over in our Motley Fool CAPS community. Unlike a stock such as Toyota, which enjoys lopsided support from the bulls, the stocks I highlight here also have their fair share of bearish detractors.

The great stock debates
So, without further ado, this week's two stock skirmishes involve:

Company

CAPS Rating

Bulls

Bears

XM Satellite Radio (NASDAQ:XMSR)

*

372

371

Crocs (NASDAQ:CROX)

*

285

264


Have the bears killed this radio star?
Bipolar stocks like XM Satellite Radio are some of my favorite ones to research. When the pros and cons of a stock are clearly laid out by our community, you can figure out -- in a much more efficient manner -- which angles are smart enough to play.

For example, the general sentiment out of the bull camp is that because of factory-installation deals with several major automakers, a rapidly increasing subscriber base of more than 7 million listeners, and a possible merger with archrival Sirius (NASDAQ:SIRI), XM's stock is primed to crank out some platinum returns in 2007.

Here are a few CAPS All-Stars who have their satellites set to outperform:

  • kpscott: As the company reaches CFBE (cash flow break-even), the "cash burning" criticism falls to the wayside and we're left with a company with a growing subscriber base, growing penetration in the OEM (Original Equipment Manufacturer) market, and improving SAC (Subscriber Acquisition Costs).
  • NetscribeMedia: XM Radio has strategic partnerships with GM, Honda, Toyota, Hyundai, Nissan, and Porsche which together represents 60% of the automobile industry ... The company has reiterated that it will reach 20 million subscribers by 2010 all of which suggests that XM will have a bullish year ahead of it.
  • dstnewman: SIRI and XMSR are bound to merge. When they do, both stocks will skyrocket. Lower costs and higher subscriptions mean big bucks for long term investors.

Yet despite those arguments, many bears in our community cite XM's narrowing lead over Sirius in the race for subscribers, its highly leveraged financial position, and its nosebleed market cap of nearly $4 billion as some of the reasons to mark a big fat X on XM's stock.

Listed below is some of the criticism that bearish CAPS All-Stars have thrown in the company's direction:

  • TMFEldrehad: XMSR and SIRI are in the distribution business. Unless they can do what HBO has effectively done and control the content creation portion of the business (as opposed to doing what they're doing now which is simply to outsource that part of the business - e.g. contracting with Howard Stern, etc.), they are never going to reap the kind of outsized returns that their present valuations are based on.
  • brentvoss: I hate cash-burn and both SIRI and XMSR are very good at it. It is shareholder-wealth destruction. Sales without profits are worthless. Product is technically cool, but the stock is not.
  • TMFMmbop: Not a believer. The debt picture looks bleak despite promising operations and content.

So whom do you agree with? I'm siding with the bears on this one because of valuation concerns. I never like purchasing pricey stocks, especially those carrying the amount of debt, uncertainty, and exposure to consumer whims that XM's business does.

Of course, if you think I'm just being a satellite sourpuss, give XM an outperform rating on CAPS. Only time -- and CAPS -- will tell us who's right.

There's jelly in the belly
One more bipolar stock that our CAPS community can't seem to agree on is Crocs, the purveyor of the wildly popular jelly sandal, err, shoe ... or is it really a clog?

Well, whatever it is, the bullish sentiment hovers around the company's unmatched level of comfort, its recently signed major licensing deals, and huge growth opportunities along other product lines.

Here are a few CAPS residents who are ever-so-comfortable about Crocs' prospects:

  • AbqLawyer: The shoes are versatile, comfortable, fun ... I do believe that they will develop a hiking boot, work boots, winter boots, athletic shoes etc. Licensing with Disney and college teams is not stupid also. I see solid growth for a long time.
  • pswms: The shoes are just the beginning. The real money is probably in other uses for the remarkable closed cell resin that supports the products.
  • rewallace: Unique products. Strong earnings growth. Lots of room in world market.

But of course, this wouldn't be much of a stock battle if the entire picture was rosy. In fact, there are many bears who think Crocs looks as ugly as the sandals themselves. They cite Crocs' lack of competitive advantage, insane market valuation, heavy short interest, and dubious insider practices as fairly serious red flags.

These three CAPS All-Stars, for example, believe Crocs is merely a fad that's just waiting to fizzle:

  • TMFBreakerTAllan: Crocs has the fad shoe, but there is no moat there. Sandals are not unique, and the Crocs brand is not being exploited with accessories and apparel quickly enough -- novelty items are available at the web site -- not impressive.
  • TMFMileHigh: I realize it's the new new thing in footwear, but the secondary offering, which is designed only to enrich management and its pals, tastes about as good as spinach-flavored ice cream. (With, or without, the e. coli.)
  • ToddTracy: By my admittedly simple DCF metrics, they need to grow earnings almost 17% per year for the next five years to grow into their valuation. Do you honestly think that is realistic for a brand that is essentially a one-trick pony? Sorry, Crocs, but I don't think it is going to happen. Underperform.

So, what's your take on this stock debate? I'd have to agree with the bears once again; I think Croc's market price has gotten way out of line with reasonable growth rates.

Again, if you think there are more holes in my logic than in Crocs' clogs, then feel free to swim with the buoyant Crocs in their swamp. CAPS will let us know who's getting the best of this bet over time.

Voice your opinion, Fool.There you have it. The competition regarding these two stocks will only get more intense over time and probably needs an investor like you to finally tip the scales in one direction.

Be sure to join us next week when I'll feature two more rip-roaring investment battles. Until then, feel free to confront any bulls, bears, pigs, or funny Fools along the way.

Fool contributor Brian Pacampara holds no position in any of the companies mentioned. Disney is a Stock Advisor choice. XM is a former Rule Breakers pick. The Fool's disclosure policy never leaves room for debate.