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 165,000-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.
|
Company |
Recent Price |
EPS Estimates (This Year-Next Year) |
|
|---|---|---|---|
|
Cheniere Energy |
*** |
$2.82 |
($1.13)-($0.07) |
|
Vector Group |
*** |
$18.82 |
N/A-N/A |
|
Weyerhaeuser |
*** |
$16.59 |
$0.17-$0.92 |
Source: Motley Fool CAPS; N/A = not available.
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
We might be sweating out this summer's heat wave, but Cheniere Energy is looking for natural gas demand to surge because of it. According to the Energy Information Administration, nat gas prices are rising all across the country, even though inventories continue to rise and natural gas rotary rig counts increased for the fourth consecutive week.
Noble Energy
Some 82% of CAPS members rating the natural gas specialist expect it to overcome the structural deficits in the industry that could impede growth. Higher shale output, for example, could lead to further inventory issues, however, companies like Consol Energy
Smoking gun
It hasn't been gas that's been lighting a fire under Vector Group's stock (shares are up 34% year to date); rather, it's been the discount cigarettes that consumers have come to prefer as the government tries to tax them out of existence (even as it continues to provide subsidies to the industry). Between the $1 per pack federal excise tax and a state tax that runs as high as $4.35 in New York, consumers have switched to deep discount brands.
While Vector is a discounter, the burden smokers face hasn't been lost on premium cigarette makers like Altria
CAPS member ThePiker says investors should take note not only of Vector's brand strategy, but also that it has no debt and pays a big dividend, currently yielding 8.5%. Smoke 'em if you got 'em.
Tomorrow's big rig
The housing industry hardly needs any more inventory on the market, as prices have already been devastated, but affordable housing seems to be one area where the White House doesn’t mind spending some big bucks. A White House blog says that more than $4 billion in stimulus has been spent and that more than 80,000 jobs have been created during the process. Paper and lumber products maker Weyerhaeuser, which will convert to a REIT by Sept. 1, should be a beneficiary from the spending. It says the long-term demographic outlook for housing remains positive.
Many CAPS members are looking forward to its ultimate change in status; 80% of those rating the forest products firm believe it will outperform the market.
Checking the mercury
Are these stocks invitingly warm or bitterly frosty? It pays to start your research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine comments fellow investors have made -- all from a stock's CAPS page. Then weigh in with your thoughts on which stocks you think are hot little numbers and which offer cold comfort. It's free to sign up.
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