We know that insider buying, stock buybacks, and raising guidance are considered bullish signs. But what about the opposite?

Insider selling isn't always a sign of rough waters ahead -- the insider might need the money for Junior's education, or for other reasons that have nothing to do with the business. And while stock dilution can be a bad thing, splitting a stock to make more shares available can be good in some cases.

Don't look down
What about lowering guidance? It could be a warning of poor performance for the foreseeable future, or it could be a small speed bump on the road to further profits. When a company forecasts lower profits, its stock usually takes a hit. Maybe it's time to get out, too -- or maybe it's time to buy more!

To help tell the difference, we're going to turn to the Motley Fool CAPS community to learn which of these stocks Foolish investors think have the power to turn lemons into lemonade.


Forecast Period

New Guidance

Analyst Forecast

Year-Ago Actual Earnings

CAPS Rating (out of five)


Q1 2007





American Superconductor (NASDAQ:AMSC)

FY 2007






Q1 2007





Sources: Company SEC filings; Yahoo! Finance. CAPS Ratings courtesy of Motley Fool CAPS.

CAPS players have a more favorable view of this crop of companies than last week. The system currently asks more than 25,000 professional and novice investors alike to rank the thousands of stocks in our CAPS universe, overweighting the opinions of the most successful and accurate among them. From that data, CAPS rates each company from one to five stars, with five stars being the best.

Star of the lemonade stand?
There does seem to be one stock that has the power to make investors pucker up: American Superconductor. Why does this manufacturer of high-temperature wire and utility electronic systems generate such favorable views?

Listen to these pitches:

  • NVMatt, a highly rated player scoring better than 85% of all other CAPS investors, says: "AMSC is in a position to offer some of the most promising technology to make all energy transfer more efficient. They have been slow to promote, but I take that as cautious and patient management. After the markets reward for their most recent [acquisition] and contract news, I think they may decide to become bolder in the future."
  • Newcomer to the CAPS community MarcusAntonius notes American Superconductor's status in the wind power field: "Proprietary technology, multiple 'key' patents and acquisition of companies offering unique energy and money saving alternatives to carbon based energy will rocket this company's earning and stock price. Wind power systems producing energy without greenhouse emissions, a super efficient energy transmission product line and a worldwide marketing force have lead to sales in China, Europe and North America. This stock offers a great 'pure play' opportunity to participate in the alternative energy market. AMSC is very volatile and may not be suitable for many investors at this point."

The stock has had a big run-up so far this year on the basis of its Northrop Grumman (NYSE:NOC) strategic partnership and the wind power acquisition. Orders for the latter are coming in from the Far East, which could mean greater revenues -- and possibly profits -- in the future, even though the outlook immediately ahead is cloudier. But right now, the company faces a restructuring and layoffs.

So are the bulls right? Or will the bear argument win out? Want to tell us what your opinion is on these companies? Then click here to join the Fool's groundbreaking achievement in collective investor intelligence. It's completely free.

Make your 27-second video stock pitch for the chance to win $5,000. Click here for more information.

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