These Cold Stocks Are 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 170,000-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; NA = 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
At a market cap of just $100 million, Ascent Solar seems an insignificant player compared to the likes of $11 billion giant First Solar (Nasdaq: FSLR), or even the $1 billion SunPower (Nasdaq: SPWRA). Yet Ascent could still be a big winner: It's become the first maker of thin-film, monolithically integrated solar power panels made from copper, indium, gallium, and (di)selenide (CIGS) to receive full IEC 61646 certification.

That means Ascent's panels can withstand 1,000 hours of 85% humidity at 85 degrees Celsius (185 degrees Fahrenheit), which will open up more opportunities for companies to test its panels as it pushes into commercial, industrial and residential rooftop markets.

Ascent's stock soared 34% on news back in October, but has since sagged under the weight of an opportunistic secondary offering designed to exploit its new, higher share price. CAPS member randomtask16 figured Ascent would pull back after the euphoria of the certification news wore off, though he still thinks it's a net plus for the solar shop. Meanwhile, StocksForLimits thinks the company will work through the downdraft this offering caused.

Let us know in the comments section below or on the Ascent Solar CAPS page whether this could become a stock too hot to touch.

I'll drink to that
For beer connoisseurs, it's tough to find an independent craft brewer these days. Even Samuel Adams maker Boston Beer (NYSE: SAM), which revolutionized the craft brewing industry, has grown so large that it will soon no longer qualify to be considered one itself.

On the surface, Craft Brewers Alliance would seem to fit the mold, as a conglomeration of smaller breweries like Redhook Ale, Widmer Brothers, and Kona Brewing. Yet more than a third of the company is owned by Anheuser-Busch InBev (NYSE: BUD), and there's continued speculation that the King of Beers may want to own the whole thing.

While beer drinkers may lament the loss of independence, beer-drinking investors might want to keep an eye on Craft Brewers. Net sales rose 15% in the third quarter, as shipments increased 11% to 165,000 barrels. In comparison, Boston Beer experienced a 14% increase in shipments, to 613,000 barrels. Although Samuel Adams may be my favorite beer, Craft Brewers Alliance still exhibits the hallmarks of a small brewery with a lot of growth potential.

CAPS All-Star TMFMuse doesn't think that Craft Brewers has been skunked by its relationship with A-B:

[Craft Brewers] may be a roller coaster microcap in the short term, but I think its got a strong future. Its distribution partnership with BUD is essential to its success, which could be a negative if the deal were at risk, however I don't see BUD pulling out. [Craft Brewers] seems more like their little experiment in the microbrew industry, and is more likely an acquisition target if things go well.

Only you can decide whether the brewer belongs in your portfolio. Add it your watchlist, and get all the Foolish news and analysis about the stock aggregated in one place.

A healthy outlook
Apparently, short sellers were on to something at YM Biosciences, even if the results of the biotech's early stage results of its myelofibrosis treatment prove to be as good as the company says they are. According to YM, the drug was well-tolerated in positive clinical tests. But the stock has sold off nonetheless, falling almost 20% since the results were released.

With 98% of the CAPS members who've rated the biotech thinking it will outperform the broad market averages, our community seems to believe that the therapy has potential in later trials. If so, the lower price could be a new buying opportunity. Head over to the YM Biosciences CAPS page and let us know whether you think the stock will remain on standby.

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 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 hot little numbers, and which offer cold comfort. It's free to sign up.