5 Stocks Guiding Higher

Stock analysts have just as much probability of being right with their forecasts as economists, meteorologists, and fortunetellers.

Weather forecasters may very well be laughing at the accuracy of stock analysts, if business consultant William Sherden's book The Fortune Sellers is correct. He says meteorologists at least have a sound scientific basis for their predictions. They might not make any better predictions than anyone else, but at least there's a reason for what they do. Everyone else is about as accurate as monkeys throwing darts at a dartboard or flipping a coin.

Channeling Mulder and Scully
So why do we follow stock analyst forecasts? Is it that they seem credible or that we're particularly gullible? Probably both, but according to Opinion Dynamics, 34% of the population believes in UFOs (up from 18% just a few years ago). If you can believe in flying saucers, it's not such a stretch to think analysts have their pulse on Corporate America.

Before the advent of Regulation FD, analysts were far more optimistic in their opinions than they were afterwards. Today they tend to think companies will underperform more than they do. State Street Global Advisors says that might be because companies are "more explicit" in their guidance, hoping to minimize share price volatility.

Is the "Truth" out there?
If companies are providing more and better information, then let's use that to our advantage. When companies announce their earnings results, they oftentimes provide guidance for the coming quarter and year. While these reports aren't 100% accurate, either, a company knows its business better than anyone. Its estimates should be better than most in predicting what the future will bring.

Analysts are using that data, and now you can, too. With the help of the no-cost Motley Fool CAPS investor intelligence community, we can tap their collective database on more than 4,000 stocks.

Investors rate each company, and CAPS overweights the opinions of the most successful and accurate to assign a ranking of one to five stars, with five being the best. Using this to our advantage, we'll look at those companies that have guided higher and which CAPS believes have the best chance to outperform the market.

Here are five highly-rated companies that just guided higher last week:

Now, this isn't a list of stocks to buy. It's a list for further research. These are companies showing signs of growing their business and are followed by both the analyst and CAPS communities. Although I own shares of K2, one that intrigues me here is Korn/Ferry, an executive search firm that has attracted the attention of nearly two dozen CAPS All-Stars. It trades at a discount on most metrics to competitors like Heidrick & Struggles (NASDAQ:HSII) and posts better operating margins.

Agree? Then share that opinion with the thousands of fellow Fools on CAPS. And if you've got a different opinion, you can spell that out, too, by leaving your own commentary there. It's how investors are helping each other find the best investments in the market today. Click here to get started now in this completely free service.

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Fool contributor Rich Duprey owns shares of K2 but does not own any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.