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's made that upward swing.

An astrolabe for investors
But Motley Fool CAPS' proprietary ratings, aggregated from the opinions and accuracy of 83,000-plus investors, 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 investor sentiment to help determine the best time to invest. Let's look at one- or two-star rated companies that have recently enjoyed a bump in investor confidence, and see whether the stars are really aligning in their favor.


CAPS Rating

Recent Price

1-Year Return

Crocs (Nasdaq: CROX)




G-III Apparel (Nasdaq: GIII)




Marchex (Nasdaq: MCHX)




Symyx Technologies (Nasdaq: SMMX)




Countrywide Financial (NYSE: CFC)




Obviously, this is not a list of stocks to buy -- just a starting point for further research. Still, consider the case of Symyx, which CAPS investors have held in generally low regard for some time. However, beginning with the start of the new year, the CAPS community began marking the contract R&D firm up, even as its stock drifted lower. After reaching a low point toward the end of January, the stock has been moving upward, and now CAPS investors are looking up once again.

A rose by any other name
When this whole Internet thing started, not many people realized what it would mean to have a popular domain name that could drive eyeballs -- let alone dollars -- to your site. But "not many" doesn't mean "no one," and a few smart people bought up seemingly generic domain names:,, even

Today, owning domain names is big business, since they can go for thousands and sometimes millions of dollars. For example, Moniker just brokered a $4 million deal for developed website Those kinds of numbers may be interesting investors in Marchex, the owner of some 100,000 of the top domain names. It bought its bundle for $164 million in 2005, and it's been developing that portfolio ever since. Its names now include,, and Yum!

Perhaps fears that domain-seekers wouldn't spend much money in a tight credit environment cut Marchex's stock in half, from $16 a share it traded at last summer to its current $8. Whatever the reason, a company like Marchex seems to have some undervalued property sitting on its books, like those companies whose balance sheets hold real estate purchased decades ago. Of course, value is what someone is willing to pay, but the weekly auctions seem to point to a still-healthy market.

Of the 99 investors at CAPS who have taken a stance on the domain broker, 87% feel it will outperform the markets. Some, like CAPS All-Star lemus with a 94.12 player rating, felt the high short-interest in the stock ought to cause a squeeze. That was last August, when Marchex had around 25% of its shares sold short. Today, that number is more than 42% of the outstanding shares. Lemons, anyone?

Yet others, like princetontiger88, don't see a whole lot of value in Marchex's portfolio and think the stock is way overvalued. Princetontiger said, "Most people don't even understand this company. It's way overvalued. 500 million for owning domains that don't even rank at google/yahoo's top?"

Shine your starlight
Will Marchex be able to name its price? Well, we haven't yet heard from you, and at Motley Fool CAPS, every investor's opinion counts. Your voice could determine whether these stocks become shooting stars or supernovas. Since it's free to sign up and post your thoughts, why not use this opportunity to take your star turn?

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