5 Cold Stocks Heating Up

When a stock's share price is lower than a North Dakota thermometer in February, investors tend to give it the cold shoulder. But as the market warms to a stock's prospects, its price can heat up in a hurry. Alas, you can rarely tell that a stock is melting investors' hearts until after it's made that upward leap.

Taking the market's temperature
But Motley Fool CAPS' proprietary ratings, aggregated from the opinions and accuracy of 140,000-plus members, offer a great way to monitor investor sentiment. Following a CAPS rating trend can help us determine the best time to invest. Let's look at previously rated one- or two-star companies that have recently enjoyed a bump in investor confidence and see whether they're truly heating up -- or headed back to the deep freeze.

Source: Motley Fool CAPS.

Obviously, this is not a list of stocks to buy -- just a starting point for further research. Yet if some of the best investing minds are taking notice of these stocks, maybe we should too. 

Caution: Contents may be hot
The approaching flu season is causing the stocks of companies dabbling in swine flu vaccines to take flight. Investors might be tempted to think that pigs will fly before they'll invest in these companies solely because of a seasonal flu, but shares of AVI Biopharma have been flying high recently. The stock is up 20% this past week, in part because Beijing approved Sinovac Biotech's (NYSE:SVA) swine flu vaccine for production, bringing the issue back front and center.

Despite a second-quarter loss of almost $20 million and the overhang caused by the costs associated with its warrant liability as its stock rose, AVI Biopharma has had a string of positive news events this year, including a Defense Department contract to analyze the swine flu to determine work on a flu vaccine of its own. Shares have nearly tripled in value over the last six months, as have those of BioCryst Pharmaceuticals (NASDAQ:BCRX), another speculative name in the swine flu niche. It's enjoying a greater than 800% increase in its stock over that same period.

CAPS member jolaz thinks the hysteria that swept the country earlier this year when the outbreak first began will rage again, ultimately inoculating AVI's shares from any contagion: "[AVI Biopharma] is going to benefit from the swine flu hysteria. Only thing I don't like is 11 million warrants outstanding."

Still the friendly skies
We know, we know. We've heard the admonition from Warren Buffett to avoid airline stocks at all costs, but regional player Republic Airways has been proving itself to be a tough competitor. It beat out Southwest Airlines for the remains of regional carrier Frontier Airlines and recently reported a 7.7% increase in revenue passenger miles, while also increasing available seat miles by 3.7%. That's significant, especially considering that Continental Airlines just reported its August revenue per available seat mile dropped 17% as it cut capacity by 6%.

If you're going to invest in the industry, CAPS member Momentum21 figures a better way is in the regional players: "Regionals like this seem like a good bet...fuel might not be as big of an issue as most think going forward ..."

Shine your starlight
So are these stocks driving ahead or ready to crash? It pays to start your research on 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 on which stocks you think are 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?